Of all the GOP presidential candidates, former Florida Gov. Jeb Bush has been the most tightlipped on federal tax reform. So far, Bush has kept his vision vague, calling for a “vastly simpler system” and “clearing out special favors for the few, reducing rates for all.”
Just last week, he used the release of 30 years of his tax returns to call for lower tax rates. Tax analysts on both sides of the aisle have said his higher-than-usual tax rate for a person with his wealth is either due to poor planning or a savvy political maneuver to avoid the Mitt Romney problem.
His record as governor of Florida and his recent public pronouncements suggest his tax reform proposals would likely focus on lopsided tax cuts.
Record as Governor of Florida
During his eight years as governor of Florida, Bush pushed through about $13 billion in tax cuts, a substantial portion of which went to the wealthiest Floridians. The most significant was his cut and eventual repeal of Florida’s intangibles tax, which amounted to more than three times the size of any other category of cuts enacted under his watch. This low-rate-tax on the value of residents’ intangible assets (such as stocks, bonds and accounts received) was one of Florida’s only progressive sources of tax revenue; eliminating it primarily benefited the state’s wealthiest residents and made its tax system even more regressive.
Besides repealing the intangibles tax, Bush backed a series of significant cuts to the property, sales and corporate taxes in the state. While the corporate tax cut went disproportionately to the wealthy, the cuts to the sales and property taxes provided low- and middle-income taxpayers with a break as well. These breaks, however, meant cuts to public services, including extremely damaging cuts to the state’s foster care system.
In 2001, state legislators pushed a sales tax reform package that would have expanded the sales tax base to new products and services and used the resulting revenue to lower the sales tax rate. The reform package generated opposition from groups whose products and services would no longer be exempt from sales tax. In the fact of this opposition, Bush opposed this sensible plan.
Because Florida does not have an income tax, it has one of the most regressive tax systems in the nation and Bush did nothing to change this reality. The year Bush left office, the bottom 20 percent of Florida taxpayers paid 13.5 percent of their income in state taxes, five times the 2.6 percent rate paid by the top 1 percent of Florida taxpayers. In other words, while Bush may tout Florida as a low-tax state, this is only true for the state’s wealthiest residents.
Tax Cutter and Tax Pledge Resister?
In recent years Bush has managed to distinguish himself from his fellow candidates in one major way: he is the only GOP presidential candidate that has refused to sign Grover Norquist’s anti-tax pledge. The infamous Norquist pledge requires that candidates promise to vote against any tax increase no matter what the circumstance.
Bush has indicated his openness to a deficit reduction deal that includes tax increases in exchange for substantial spending cuts. For example, in 2011 Bush said he would absolutely support a deficit reduction deal of one dollar of additional revenue for every ten dollars in spending cuts, a theoretical deal rejected by every single one of the 2012 GOP presidential candidates.
Yet Bush has based much of the case for his presidency on his record as a tax-cutting governor. His Super-PAC website, for instance, touts his record of cutting billions in taxes as part of his “limited government approach” that “helped unleash one of the most robust and dynamic economies in the nation.” Bush has also indicated his support for tax cuts at the federal level, saying at the Conservative Political Action Conference (CPAC) that despite trillions in debt and unfunded liabilities he believed that “You can lower taxes and create more economic opportunity that will generate more revenue for the government.”
Tax reform is shaping up to be a major issue in this campaign. Bush, like most of the other candidates, hasn’t formally outlined a proposal, but his choice of Glenn Hubbard, one of the architects of the regressive and budget busting Bush tax cuts and of Mitt Romney’s regressive tax cut plan from the 2012 campaign, as a top economic adviser sends a clear signal about the direction in which he’s heading.