Republican presidential candidate Jeb Bush released a new tax plan this week that seemed to confuse even the New York Times. The paper of record ran two headlines that seemingly countered one another:
Many news outlets branded Bush’s plan as a nod to economic populism. A third New York Times piece even made the direct comparison to Sen. Elizabeth Warren (D-MA). Politico’s headline actually claimed the plan hits Wall Street. But as ThinkProgress has already pointed out, the plan itself is basically a redux of Bush’s tax cuts for the wealthy. New York magazine’s Jonathan Chait says Bush’s plan seems to have left people at best confused and at worst “suckered.”
The former Florida governor’s plan may have addled some because it seemed to latch on to something fellow presidential contender Donald Trump mentioned last month, that hedge funds were “getting away with murder” and that he would be open to raising taxes on capital gains, something economists say is one of the biggest contributors to wealth inequality.
Yes, Bush proposes closing the “carried interest” loophole, which so many hedge fund and private equity managers have taken advantage of to count their incomes as investments and are taxed at a lower rate, but he simultaneously drops rates on capital gains income and dividends to a maximum of 20 percent, thus undermining any populist cred he got from closing the loophole.
Another way Bush’s plan earned some populist branding is because it offers some tax benefits for the middle- and lower-class tax brackets, including an expansion of the Earned Income Tax Credit which is generally seen as a boon to the working poor. But it’s entirely likely those will be paired with “strong fiscal discipline” — which is generally conservative code for spending cuts to social programs on which people in those tax brackets generally rely. The fiscal discipline point is noticeably vague, and the only real guide we have so far is that Bush didn’t think his brother, who once proposed cutting domestic spending by $2.5 trillion, had enough of it.
This is perhaps because Bush been listening to Ronald Reagan’s contingent of trickle-down economic advisers who generally think that the magic of tax cuts will somehow magically result in an absurdly high 4 percent economic growth rate. Unfortunately, though, Reaganomics resulted in some effects that wouldn’t earn the label of populism at all, including falling wages, an increase in the wealth income gap, and a spike in homelessness.