The Tax Policy Center — one of the only nonpartisan economic think tanks respected on both sides of the aisle in Washington — has mostly been quiet during the Republican presidential primary season. Though Republicans have been releasing plenty of tax plans, most have lacked sufficient detail for a thorough TPC analysis.
But on Tuesday, TPC broke the pattern and announced that it had run the numbers on Jeb Bush's tax plan. The results: The plan would increase the deficit by $6.8 trillion over 10 years, and gains, both percentage-wise and in dollar terms, are way, way higher for the richest Americans:
Overall, the findings are very similar to an earlier analysis by the left-leaning Citizens for Tax Justice, summarized in the chart here. CTJ had estimated that the cut would cost $7.1 trillion, nearly identical to TPC's $6.8 trillion estimate. The new analysis actually finds worse results, distributionally, than the initial one. CTJ found that the poorest 20 percent would see a 2.1 percent or $316 tax cut, while the top 1 percent would get 10.2 percent or $177,246; TPC's numbers are 1.4 percent/$251 and 11.9 percent/$273,332 respectively.
Let me repeat that, because it's important. The typical low-income American will get $251 under Bush's plan. The typical one-percenter will get $273,332. The typical 0.1-percenter will get $1.26 million. Overall, TPC finds that 70.8 percent of the cost of the tax cut comes from giveaways to the top 20 percent. Nearly half the cost (46.2 percent) consists of giveaways to the top 1 percent. And nearly a quarter (22 percent) goes to the top 0.1 percent.
The priciest parts of the plan are the rate cuts. TPC finds that cutting individual rates down to just three — 10 percent, 25 percent, and 28 percent — costs $2.7 trillion over 10 years, while Bush's proposal to cut the corporate rate to 20 percent and eliminate a minimum tax system for corporations would cost $1.6 trillion. Bush gains back $1 trillion by eliminating the deduction for state and local taxes (a deduction that indirectly subsidizes high-tax blue states, and as such is a target for many Republicans), but that's nowhere near enough to make up the cost of the other proposals. Allowing all investment to be immediately expensed, for instance — a key part of Bush's corporate tax policy that's meant to encourage companies to invest — costs $1.5 trillion across the individual and corporate codes.
Why the analysis matters
Jeb Bush is currently floundering in the polls basically everywhere that counts. At this point, he looks a lot like former Texas Gov. John Connally in 1980, or Texas Sen. Phil Gramm in 1996: Republicans who began presidential primaries with huge war chests only to waste the money and lose very, very badly.
But the Bush analysis matters because Bush's plan bears a rather strong resemblance to those of Donald Trump and Marco Rubio. Those plans haven't been scored yet, and there are real differences, but the core approach is the same: massively slashing both individual and corporate rates while expanding deductions for low-income people and giving corporations tax breaks on investment.
If those campaigns refuse to put out more detailed information, then they won't get analyses from TPC, which is by far the most credible and respected group doing estimates like this. That'd be a shame. TPC's Roberton Williams says the center is hoping to analyze Rubio, Cruz, and Trump, but so far, apart from Bush, cooperation hasn't been exactly universal. "The lack of detail makes analysis challenging, to say the least," he told me in an email. "We have tried to contact the campaigns to get more detail with mixed success. We got good cooperation from the Bush campaign and thus finished our analysis of that plan first."
In the worst case, in which TPC never gets the details it needs for Rubio and Trump's plans (or Ted Cruz's very different plan), the Bush analysis becomes hugely valuable. It gives us a glimpse of what Rubio and Trump's TPC scores would look like. It indicates that the plans are likely to be very, very expensive, with benefits concentrated at the top.
The analysis also shows how much more extreme Republican tax policy has gotten since Bush's brother was president. The sticker price of George W. Bush's 2001 tax cuts was $1.35 trillion; his 2003 tax cuts were estimated at $350 billion. The cuts were rightly considered one of the most dramatic reductions in federal taxes in modern American history. But their $1.7 trillion total estimated cost at passage (they ended up costing less after the recession led incomes to plummet) is only one-fourth the size of what Jeb is proposing. Jeb is trying to position himself as a responsible, establishment Republican alternative to the likes of Ted Cruz and Donald Trump. That he thinks he can do that while proposing four times more in tax cuts than his brother passed is extraordinary, to say the least.