Former Florida Gov. and Republican presidential candidate Jeb Bush on Wednesday outlined his economic plan, a proposal he said would lift the economy out of the post-recession “new normal” and “lift up everybody.”
“My plan for the entire economy will create a true revival of the private sector, and 19 million new jobs,” Bush told a group of about 400 at Morris & Associates, a commercial refrigeration supplier, in Garner. The attendees included Bush supporters and Morris & Associates employees.
“The new normal is a comfortable ride for affluent people living on their portfolios,” Bush said. “My plan will help those who live on their paychecks and who haven’t seen a raise in a while.”
Bush said his plan would push the economic growth rate to 4 percent, up from the 2 percent growth rate experienced since the Great Recession. “We need to jump-start our economy, and we can do that by fixing our broken tax code,” Bush said.
The plan calls for simplifying the personal income tax code by reducing the number of tax brackets from seven to three: 10 percent, 25 percent, and 28 percent. Bush said he would end the Alternative Minimum Tax and the marriage penalty. He would nearly double the standard deduction while limiting the amount of deductions “that wealthy people and other itemizers can take, other than charitable contributions.”
Bush also would expand the Earned Income Tax Credit.
He said under his plan, people earning $200,000 or more would bear a greater portion of the income tax burden, while families of four with an income less than $40,000 would pay no federal income taxes.
Bush said he would lower the corporate tax rate from 35 percent to 20 percent. He said he would end taxation of profits earned overseas, allowing $2 trillion now held overseas to come back to the United States with a one-time tax.
He also plans to allow businesses to deduct new capital investment fully in the first year, a move he said would help businesses buy equipment, build factories, and invest in other growth. He would take away tax deductions for corporate borrowing.
“Now those on the left, and even some people who call themselves Republicans, will tell you that to save U.S. jobs, we have to throw up a bunch of walls and tariffs and protect our businesses from competition,” Bush said. “That’s a siren call of surrender. … Protectionism never works.”
Rep. John Torbett, R-Gaston, and a Bush supporter, said he thought people would be “happy and very excited” about Bush’s tax reform proposal.
“He takes a lot of the income tax and pretty much gives people in the middle income great breaks, gives them the affordability to earn more money, pay less in taxes, and raises the ability to put food on the table by bringing the wealth up in the middle class,” Torbett said. “That’s what we need right now most desperately in the country. Nobody’s had a solution. His sounds like … a very workable solution.”
Torbett said he thought the proposal would help reinvigorate Bush’s presidential campaign.
“I think he’ll articulate it well, and people will say, well, that pretty much makes sense,” Torbett said.
Roy Cordato, vice president for research and resident scholar at the John Locke Foundation, said he thought Bush’s plan is “pretty good.”
“I particularly like the fact that he wants to introduce immediate deductibility of all business expenses and equipment investment rather than the current system where there is deduction over time,” Cordato said. “The lowering of the [personal income] rates and bringing the top rate down to 28 percent, which is what it was under the Reagan tax reform of 1987 — the bipartisan tax reform, actually — and the bottom rate down to 10 percent, taking lots of people off the rolls at the bottom end, are all very good.”
Cordato said exepmpting a family of four making less than $40,000 a year from income taxes is a way of making the system “progressive without penalizing work effort.”
“Obviously, I would prefer a single flat rate, but it’s huge, bringing the top rate down,” Cordato said. “The reduction of the corporate income tax [and capital gains tax] would make a lot of sense also.”
Cordato also liked eliminating the overseas profits tax, which he called a “tax on repatriating profits.”
“The lowering of the tax rates across the board should definitely help families,” Cordato said. “It appears to be a dramatic simplification, which is needed.”
Bush noted that the Reagan reform plan passed with bipartisan support, and he hopes his will too. He added he plans to emphasize civility in debating his opponents in the presidential campaign.
“Don’t demonize people that disagree with you,” Bush said. “I don’t believe liberals have bad motives. I just believe that they are wrong.”
Barry Smith (@Barry_Smith) is an associate editor at Carolina Journal.