Jeb Bush may have a tax problem if he formally decides to run for president in 2016.
In the past, Bush has rankled conservatives by expressing support for a hypothetical deal that would cut federal spending by $10 for every $1 in tax increases. To the uninformed, conservative opposition to such a deal seems like anti-tax stubbornness. However, history justifies opposition.
President Ronald Reagan was offered a three-to-one deal of spending cuts to tax increases in 1982. He signed the deal, taxes rose, but the spending cuts never happened.
Bush’s own father fell victim to the same trickery during his presidency. President George H.W. Bush accepted a two-to-one deal of spending cuts to tax increases with congressional Democrats. Just as in 1982, the tax increases were real but the spending cuts were nonexistent. Breaking his infamous “read my lips” promise of no new taxes almost certainly hurt Bush in the 1992 election.
Legislatively, it is difficult to guarantee that a deal of $10 in spending cuts for $1 in tax increase would last. Nothing can stop Congress from undoing past legislation.
Still, a hypothetical deal to cut spending by $10 for $1 in tax increases is just that: hypothetical. Such a deal, even in name only, would alarm a public afraid of massive cuts in government services. The political toxicity of a ten-to-one spending cuts to tax increases deal makes it unlikely to be proposed. Jeb Bush may not find the spending cuts of a more realistic two- or three-to-one deal as worthwhile.
It would be more informative to hear Bush’s positions on the budgets proposed by Rep. Paul Ryan, R-Wis. Ryan’s budgets typically set the federal budget on course for balance without raising any taxes.
Bush’s position on a federal balanced budget amendment would also be telling. Although the president has no voting power on constitutional amendments, the president’s support and political capital would be crucial for an amendment to gain enough support in Congress and the states.
If he decides to run, Jeb Bush will be pressured to sign the Taxpayer Protection Pledge from Americans for Tax Reform. Bush did not sign the state-level pledge while running for governor of Florida, but he may need to change his mind if he wants to win the Republican nomination.
Every GOP nominee since since the pledge’s inception during the Reagan presidency has signed it, according to Grover Norquist, the president of Americans for Tax Reform. In 2012, every GOP candidate except Jon Huntsman signed it. Many of the prospective 2016 GOP candidates, including Gov. Scott Walker, Gov. Rick Perry, Gov. Bobby Jindal, Sen. Rand Paul, and Gov. Sam Brownback signed and held to the pledge in their current roles, Norquist told the Washington Examiner. He also said Gov. Chris Christie did not sign the pledge, but made the same promise vocally and stuck to it.
Bush has said that he doesn’t support tax increases, but has sworn off signing any pledges that would bind him in the future. “Basically, Jeb is saying is he won’t support tax increases right now,” Norquist told the Examiner. “Two years from now is a different story.”
Another relevant issue is the elimination of special-interest tax breaks. Conservatives typically argue that many special-interest tax breaks should be closed, but not without cuts in tax rates that make the deal revenue-neutral. “I would love to see … dramatic reductions in tax expenditures and have a dollar-for-dollar reduction in tax rates that would spur economic activity,” Bush said during a House Budget Committee hearing in 2012.
At the same hearing, Bush also said he cut taxes every year while he was governor of Florida. He cut taxes by $19 billion as governor including repeal of an investment tax, according to the Wall Street Journal.
Still, this may not be enough for conservative activists whose endorsements hold major influence in the GOP primary. Given his proven record as a tax-cutter, why doesn’t Bush just alleviate activists’ concerns and rule out tax increases in the future?
Many of these questions cannot be answered until Bush formally announces a campaign. He, along with his advisers and spokespeople, must be prepared to answer them soon after the campaign begins. Bush’s tax policy positions, along with his record, will be important factors as voters and activists decide who they want in the White House on Jan. 20th, 2017.
