Mitt Romney’s attempt to restart his flailing candidacy by releasing his tax reform plan will fall flat because his plan is nothing more than tinkering around the edges. Sure he’s reduced his 59-point plan down to 5 in his Wall Street Journal op-ed. All he’s managed to do is condense 59 stale ideas (not that a few of them aren’t good ones, they’re just not very innovative) into 5 dull ones. Here’s a summary of his plan:
- Across-the-board 20% reduction in marginal individual income tax rates
- Reduce the corporate tax rate to 25% from 35%, transition from a world-wide taxation system to a territorial one, and make the R&D tax credit permanent
- Maintaining the low 15% rate on capital gains, interest and qualified dividends, and eliminate the tax entirely for those with annual income below $200,000
- Abolish the death taxand repeal the Alternative Minimum Tax
- Bring stability to the tax code by making these changes permanent
A few problems here. Even if we were to reduce the corporate tax rate to 25%, while better than Obama’s plan to reduce it to 28%, the current average corporate tax rate for industrialized countries is 24.5% and that factors in Japan at the rate of 38.8%, which is being cut to 25.5% on April 1 thereby further reducing the overall average. The bottom-line is that such a change is too timid to have the type of impact that is needed to jumpstart America’s economic engine.
Of course, we shouldn’t be too surprised given that Romney is relying upon Bush alums who are “experts in the moderate camp of GOP economics.” I’ve said it before and I’ll say it again — MITT ROMNEY IS NOT A SUPPLY-SIDER. That is a real problem given that history shows Republican candidates win the presidency when they run as supply-siders, whether they are genuine or just faking it. Austerity candidates, which is how Romney is framing his candidacy, lose every time.
since 1896, only supply-side Republicans have become President. Voters only elect Republicans that credibly support sound money and low taxes.
This was true from McKinley, Roosevelt, and Taft between 1896 and 1908, to Harding and Coolidge during the 1920′s, to Reagan and George W. Bush during the last 30 years. Of course, some Republicans faked it during their campaign and won; for example, Eisenhower (1952), Nixon (1972), and George H. W. Bush (1988). And, predictably, “austerity” Republicans have never been elected president; for example, Hoover (1932), Goldwater (1964), George H.W. Bush (1992) and Dole (1996).
To which I would add John McCain (2008.)
Mitt Romney has cast his lot with the austerity crew and that is a losing proposition. If you want to find someone who is electable, look elsewhere…