Santorum's Pro-Family Tax Plan Gains Support
A new poll from CNN shows that former Sen. Rick Santorum of Pennsylvania is now in third place in Iowa. How about that? Only in this wacky year -- where Mitt Romney is considered the presumptive nominee and a gaggle of other imperfect candidates divides the anti-Romney vote -- is this good news for a candidate. But CNN's poll, which only talks to Republican primary voters and therefore skews against Rep. Ron Paul a bit, now has Santorum ahead of Gingrich.
I haven't really looked at Santorum that much and enjoyed this analysis of his economic plan from Jim Pethokoukis, who is an awesome economics reporter now at AEI. The plan is marketed as "Made in America: Empowering American Families, Building Economic Freedom," and can be found in its 31-point entirety here.
Many of the points are standard GOP tax plans but here are a few that are different:
1. Cut and simplify personal income taxes by cutting the number of tax rates to just two – 10% and 28% returning to the Reagan era pro-growth top tax rate.
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.
9. Eliminate the corporate income tax for manufacturers – from 35% to 0% – which will spur middle income job creation in the United States and will create a job multiplier effect for workers.
10. Spur innovation in America by increasing the Research & Development Tax Credit from 14% to 20% and make it permanent.
Intriguing, eh? Pethokoukis quotes economist Robert Stein in favor of a pro-natalist tax policy:
In particular, it is time to rethink how the tax code treats parents. Too many free-market economists still consider families an afterthought — arguing that the tax code should be “neutral” about raising children, as if parenting were merely one hobby among many. But raising children is hardly just another pastime: It is one of the most important services any American can perform for our country.
Even if we ignore the societal and cultural implications of parenting and consider economic factors alone, no government — especially not a government committed to an entitlement system like ours — can be neutral toward the very existence of future generations of taxpayers. Our nation’s long-term economic prospects are threatened by a declining fertility rate that, if it remains constant, will only barely manage to replace our current population. And even as Social Security and Medicare depend on large numbers of future workers, they have created an enormous fiscal bias against procreation, undermining an important motive for raising children: to safeguard against poverty in old age. …
To correct for this inadequate treatment of households with children, the existing dependent exemption for children, the child credit, the child-care credit, and the adoption credit should be replaced with one new $4,000 credit per child that can be used to offset both income and payroll taxes. (This amount is set much closer to the $3,250 figure than the $8,500 one mostly to reduce the plan’s negative impact on federal revenue.)
Pethokoukis adds his bottom line:
Santorum has one of the most politically and economically cohesive policy plans in the GOP field. He wants to help middle-class families and sees tax policy as a way of directly doing that, beyond trying to boost GDP growth. It’s more populist-conservative in many ways than pure free-market/libertarian, the latter of which seems to more reflect the Tea Party trend in GOP economic policy. Not something a Wall Street or Ivy League economist would cook up, certainly. And supply-side economics is about altering incentives to boost growth (and incomes and jobs), not altering fertility rates to boost human capital or easing the tax burden on families. No matter Santorum’s political fate, his ideas may gain further traction on the right as some policymakers and wonks see the limits of an economic approach geared almost exclusively around lowering marginal tax rates and cutting spending.
- Comment (18)
- · Quote
- · UnfollowFollow (0)
Comments :
Jun '10
Re: Santorum's Pro-Family Tax Plan Gains Support
It also helps, that by this point, he knows every Republican in Iowa by name.
Dec '10
Re: Santorum's Pro-Family Tax Plan Gains Support
<sarcasm>
I am certainly relieved he's interested in maintaining a complex tax system with lots of deductions and loopholes.
<sarcasm off>
Seriously, though: Is there any evidence whatsoever that such tinkering has any effect at all on the fertility of a population? That's a serious question. I don't know the answer to it.
May '11
Re: Santorum's Pro-Family Tax Plan Gains Support
KarlUB gets close to the question. What can be done to promote the family, defined as a father, mother and child(ren), living together?
If we are to play with tax codes and loopholes, could we not create a loophole for families that meet the above definition?
BTW...great comment "Star of the North". Your sense of humor is right on.
May '10
Re: Santorum's Pro-Family Tax Plan Gains Support
Santorum's views are closer to mine than any other candidate's. I've held back from supporting him because I thought he had no chance of winning the nomination. I also think his tone and temperament leave something to be desired. But compared with the downsides of the other options, that's looking pretty darn unimportant right now.
And I think if he IS the nominee, he will be able to earn the backing of both major wings of the party. The trick will be winning independents.
But I'm not sure people won't won't find his clean-cut, hard-line image reassuring after the moral fuzz and sludge threatening to overwhelm all that's good and decent in our society and culture.
It might just work.
May '10
Re: Santorum's Pro-Family Tax Plan Gains Support
I can't offer empirical evidence, though I wouldn't be surprised if it's out there. Anecdotally, I've had many people over the years say things to me like, "We would have liked to have more children, but we couldn't afford it."
Incentives help. Disincentives make doing good and right harder.
Apr '11
Re: Santorum's Pro-Family Tax Plan Gains Support
This is what I hate about the tax code. We all say we want it simpler, BUT we applaud when a politician proposes exemptions/deductions/loopholes for favored groups. I'm as pro-industry as anybody but why should a particular industry like manufacturing get to pay no taxes? If you sell or repair washing machines, you do pay taxes. But if you manufacture washing machines, you pay no taxes. I understand the point, to promote manufacturing things here instead of over there. You're not going to buy your washing machine from a store in China or have it repaired by a repairman flown in from India. I get it. Nevertheless, I've had it with using the tax code to encourage or discourage behavior.
Mar '11
Re: Santorum's Pro-Family Tax Plan Gains Support
I'm in a similar situation -- though I am not so much a social conservative -- but his foreign policy, in particular his understanding of Islamism, is outstanding. His tax policy I would agree with, also - sounds good.
So I'm definitely leaning to him more, for the Primary.
Edited on Dec 29, 2011 at 8:55amDec '11
Re: Santorum's Pro-Family Tax Plan Gains Support
Consider Ann Coulter's column today, 12/29. She points out that a Republican Presidential candidate needs to win the votes of moderates. This is an argument I made here in "What is the problem with Rich Santorum?" (12/20/11), which received few responses.
But I think Coulter reaches the wrong conclusion. She argues that the two critical concerns are Obamacare and immigration. As others have pointed out here, Romney cannot be relied upon to repeal Obamacare. Concerning immigration, Bush could not get his immigration "reform" through Congress. A President Santorum would be in fundamental agreement with a Tea Party Congress. Another point Coulter does not emphasize sufficiently is that Romney won once in a blue state running as a RINO. Santorum won twice in the critical, pivotal blue state of Pennsylvania running as a conservative.
Edited on Dec 29, 2011 at 12:51pmNov '11
Re: Santorum's Pro-Family Tax Plan Gains Support
Pilli:
What can be done to promote the family, defined as a father, mother and child(ren), living together?
Supposing it could be done
Should a government be promoting one family structure over others?
Should we subsidize (though tax credits) people who choose to have children?
Dec '11
Re: Santorum's Pro-Family Tax Plan Gains Support
Mr. Weivoda (comment 6),
I agree that the Republican weakness for crony capitalism, including Santorum, makes Republicans rightly vulnerable to the charge that they are only concerned with helping their rich friends. Ideally, a plank in a Tea Party "Contract for Prosperity" would be a bill to eliminate all subsidies and tax breaks and preferences so that there is a level economic playing field. In my judgment, Santorum is "capable of improvement." The others, not so much.
Edited on Dec 29, 2011 at 10:58amDec '11
Re: Santorum's Pro-Family Tax Plan Gains Support
Mr. Cole (comment 9),
The reason societies have an interest in defining a healthy family is because a good social order depends on having good citizens. It should be undeniable, considering the studies and statistics, that children from single parent families are disproportionately likely to cause more problems and are less likely to become good citizens and live good, happy lives.
Clearly the U.S. has not done a good job of promoting healthy families and better persuasion in explaining what is a healthy and good way of life would be more effective than coercive laws.
I would agree that Santorum should be more measured in explaining his positions on morality. As Justice Thomas state, there is no "right to privacy" in the Constitution. Presumably, there is no "right to marriage" in the Constitution. Thus, it is left for the citizens' representatives in the state legislators to determine the law. If there is a "right to privacy" in the constitution, then federal judges will make the law. In my judgment, this is Santorum's argument. If he has gone further, he should state he will not go beyond what the constitution and prudence would dictate in the future.
Dec '10
Re: Santorum's Pro-Family Tax Plan Gains Support
katievs
Anecdotally, I've had many people over the years say things to me like, "We would have liked to have more children, but we couldn't afford it."
Incentives help. Disincentives make doing good and right harder. · Dec 29 at 8:41am
OK. But I doubt an extra $1000/year is going to do it. People don't have the money to do it because a single middle-class breadwinner can't support a family of four any more.
Ralph Baskett: Mr. Cole (comment 9),
The reason societies have an interest in defining a healthy family is because a good social order depends on having good citizens. It should be undeniable, considering the studies and statistics, that children from single parent families are disproportionately likely to cause more problems and are less likely to become good citizens and live good, happy lives.
I could not agree more. But I've seen no evidence that the Federal government or our dog's breakfast of a tax code is capable of doing something like this without massive unintended consequences.
The Great Society, after all, was supposed to deal with this. Instead, it made it worse.
Nov '11
Re: Santorum's Pro-Family Tax Plan Gains Support
Ralph Baskett:
The reason societies have an interest in defining a healthy family is because a good social order depends on having good citizens.
I'm sorry, but I'm not especially interested in subsidizing other people's choice, be it having children or buying a Prius. If you think people having children should be subsidized in the name of "good social order" or society, then you pay for it. Don't make me do it.
Dec '11
Re: Santorum's Pro-Family Tax Plan Gains Support
With nearly half of American children being born out of wedlock, the idea of tripling the subsidy is insane.
Jul '10
Re: Santorum's Pro-Family Tax Plan Gains Support
Fred Cole
Ralph Baskett:
The reason societies have an interest in defining a healthy family is because a good social order depends on having good citizens.
I'm sorry, but I'm not especially interested in subsidizing other people's choice, be it having children or buying a Prius. If you think people having children should be subsidized in the name of "good social order" or society, then you pay for it. Don't make me do it. · Dec 29 at 11:04am
Exactly.
I'll add: Why doesn't the government subsidize Me to not commit crime?
Apr '11
Re: Santorum's Pro-Family Tax Plan Gains Support
I won't get into the argument of whether being a parent makes someone a better citizen. Let's assume it does for the sake of argument. How many other things do people believe makes them a better citizen? Listening to public radio, going to church, subscribing to Ricochet, jogging, reading Tolstoy, the list could on forever. Someone will surely argue that owning a greyhound makes them a better American than someone who owns a bulldog. Or certainly a cat. If we appoint the government to tailoring the tax code to make people better citizens, these arguments will go on until the sun becomes a red giant. How about we make the tax code as simple as feasible and let people make choices for their own reasons?
Dec '11
Re: Santorum's Pro-Family Tax Plan Gains Support
Fred Cole
Ralph Baskett:
The reason societies have an interest in defining a healthy family is because a good social order depends on having good citizens.
I'm sorry, but I'm not especially interested in subsidizing other people's choice, be it having children or buying a Prius. If you think people having children should be subsidized in the name of "good social order" or society, then you pay for it. Don't make me do it.
______________________________________________________________
Thanks for responding with such clarity. I trust you do not have children where you might be concerned about their future. Fortunately, it is still safe to live in most of the U.S. without having to always watch one's back.
I will trouble you no further.
Edited on Dec 29, 2011 at 2:14pmMay '10
Re: Santorum's Pro-Family Tax Plan Gains Support
Fred Cole
Pilli:
What can be done to promote the family, defined as a father, mother and child(ren), living together?
Supposing it could be done
Should a government be promoting one family structure over others?
Should we subsidize (though tax credits) people who choose to have children? · Dec 29 at 9:07am
Yes and yes.
Of course yes. Strong and stable two parent families underwrite the state. They serve the interests of the state.