Jeb Bush has laid out his tax plan in a speech and fact sheet. Grover Norquist's Americans for Tax Reform has offered an initial reaction.
Two quick thoughts from here:
The 28% top individual rate Jeb Bush is proposing is significant in the context of his family. It was the top Reagan rate before President George H.W. Bush broke his "read my lips" pledge. And it's lower than the 35% top rate achieved under George W. Bush. The way I see it, Jeb is tacitly acknowledging his father's error, while also endeavoring to outdo his brother George W. as a tax-cutter. It's a clear and encouraging signal that he means business as a tax cutter.
Americans for Tax Reform faults Jeb for proposing to tax carried interest as ordinary income. That proposal is being interpreted in some quarters as a slap at Wall Street, but in fact plenty of Wall Street bankers and corporate executives don't like the tax treatment of carried interest by investment managers, because it means that venture capitalists and private equity guys, as well as hedge fund managers and managers of oil and gas and real estate partnerships, pay lower tax rates than they do. One can argue about whether this income is really labor or capital income, but it's been taxed as capital gains for a long time. For Mr. Bush, who pounced on Hillary for her supposed hostility to Uber, to go after the capital gains treatment of the venture capital industry that has helped speed Silicon Valley's success strikes me as a mistake. Maybe politically it will play well, but there's a case that Mr. Bush would do better to leave it to the Democrats to engage in political point-scoring at the expense of sectors of the financial industry that are contributing to growth. Meanwhile, if Mr. Bush is looking for political cover on this one on the conservative side, he has it from none other than the president of the American Enterprise Institute, Arthur Brooks, who said, "if we want to increase taxes on carried interest, I mean, that's fine for me."
