Santorum Tax Cuts For The Rich

For A Working Class Champion Focused On Social Mobility, Rick Santorum Seems To Be Pretty Interested In Cutting Rich…

For A Working Class Champion Focused On Social Mobility, Rick Santorum Seems To Be Pretty Interested In Cutting Rich…

A blog about business and economics.
Jan. 4 2012 1:48 PM

For A Working Class Champion Focused On Social Mobility, Rick Santorum Seems To Be Pretty Interested In Cutting Rich People's Taxes

JOHNSTON, IA - JANUARY 03: Republican presidential hopeful and former U.S. Sen. Rick Santorum addresses a crowd at the Stoney Creek Inn on January 3, 2012 in Johnston, Iowa.

Photo by Andrew Burton/Getty Images

I've read a fair amount over the past 24 hours, both in news reporting and punditry, about Rick Santorum's working class appeal and his "emphasis on social mobility, family breakdown and blue-collar struggles" so it was interesting to read his actual tax plan:

  1. Cut and simplify personal income taxes by cutting the number of tax rates to just two - 10% and 28% and return to Reagan era pro-growth tax rate;
  2. Simplify the tax code and reduce middle income taxes by eliminating the Alternative Minimum Tax (AMT);
  3. Simplify the tax code, encourage savings and investment, and reduces taxes by eliminating the Death Tax;
  4. Lower the Capital Gains and Dividend tax rates to 12% to spur economic growth and investment;
  5. Reduce taxes for families by tripling the personal deduction for each child;
  6. Reduce and simplify taxes for families by eliminating marriage tax penalties throughout the federal tax code;
  7. Retain deductions for charitable giving, home mortgage interest, healthcare, retirement savings, and children;
  8. Eliminate the cap on deductions for losses incurred in the sale of a principal residence;
  9. Cut the corporate income tax rate in half to make our businesses competitive around the world, from 35% to 17.5%;
  10. Eliminate the corporate income tax for manufacturers to spur middle income job creation in the United States and benefit from the job multiplier effect in manufacturing;
  11. Increase the Research & Development Tax Credit from 14% to 20% and make it permanent to spur on innovation in America;
  12. Eliminate the tax on repatriated taxable corporate income invested for manufacturers equipment investment, 5.25% corporate tax rate on other repatriated income invested in the USA, and 100% expensing for new business equipment;

It is actually true that this means Santorum stands out from the GOP pack in expressing a non-zero level of concern for the after-tax income of low-income people. Fully one of the twelve planks of his tax agenda would help an economically struggling family, which is more than I believe Mitt Romney or any of the others have mustered. As for the rest, eliminating the tax brackets above 28% is good news if you're a married couple with combined earnings of over $212,000 but otherwise useless. Similarly, economically struggling families aren't worried about their capital gains and dividend taxes, their corporate income taxes, the Alternative Minimum Tax, the R&D Tax Credit, or an estate tax that's only levied on multi-millionaires. There are a number of arguments you can make in favor of this agenda of lower taxes on corporations and rich businesses—conservatives of various stripes have been making them for decades—but in terms of the overall focus of his fiscal agenda, Santorum is in no way different from Romney or John McCain or George W Bush or Bob Dole or any of the other long list of Republicans who've touted regressive tax cuts as a way to super-charge growth. 

Indeed, despite Romney's more patrician affect it's worth noting that his tax agenda is just straightforwardly more moderate than Santorum's, emphasizing similar ideas but to a lesser scale.