Suitably Flip

Mitt Romney, Heart Breaker

First off, I think Mitt definitely performed the best tonight, largely because of the significant charisma and poise advantage he holds over the other candidates.  All he had to do was avoid gaffes and showcase the chops and he was a shoe-in to win whatever few chips were on the table tonight.  He did that and he won a few chips.

But I think Mitt threw away a great opportunity to lock up his identity as the GOP's clear best candidate.  Worse, the fumble occurred when he (partially) reversed what I've previously stated was my favorite Romney policy position.  During his CPAC keynote, Mitt vowed not only to fight to make the Bush investment income tax cuts permanent, but to do him one better and lower the tax rates on dividends and capital gains from 15% all the way to 0%.

Fabulous.  No single policy change would be more beneficial to every stratum of the American economy.

Tonight, during the "down-the-line" question about tax cuts, Mitt repeated this policy, but he limited it to "lower income Americans" (or "low and middle income Americans" - I guess I shouldn't use quotes given that I don't remember the exact phrasing, but that was the gist).

That may hold populist sway, but it's objectively a worse policy.  Worse for everyone.  Including low and middle income Americans.  The greatness of the investment income tax cuts lies in the economic growth they engender.  Another big helping of those cuts would be a tremendous boon, making our economy more robust, more flexible, and more sustainably competitive in the global capital and labor markets.

Better yet, these extra growthy tax cuts pay for themselves, just as Art Laffer predicted and as we've seen since 2003.  So there's truly no good reason - truly no conceivable, rational reason - to offer them selectively, based on income bracket.

Now... for a little self-soothing.

These were rapid fire questions and candidates clearly didn't have a lot of time to deliver comprehensive answers.  It's certainly possible that Mitt's position on investment income tax cuts hasn't changed since CPAC - that he still advocates elimination of capital gains and dividend income taxes for everyone, and that it was simply a more palatable talking to point to identify that this will be a great thing for low income Americans (which indeed it will).  I'll be interested to see the transcript to see exactly how he put it - whether he does seem to explicitly exclude higher income bracket taxpayers, or whether what he said might've been part of a longer answer or a broader policy on which he simply didn't have time or inclination to expound, in this very accelerated format.

I do hope that's the case, but lo, my heart is heavy at the possibility that it's not.  Make no mistake - eliminating the tax for all income brackets is not the more desirable policy because it lets wealthy people keep more money.  It's more desirable because the incredible growth-fueling effect of these cuts, which significantly benefit us all in meaningful and long-term ways (as compellingly illustrated last month), will largely be absent, if the cuts only apply to lower income individuals.

For his part, Mike Huckabee seemed to pick up Romney's possible fumble and explicitly espoused nixing the tax for everyone.  For all the grief Huckabee takes from the Club for Growth, he might've been the most ardently pro-growth candidate on stage tonight.

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Mitt Romney, Heart Breaker

First off, I think Mitt definitely performed the best tonight, largely because of the significant charisma and poise advantage he holds over the other candidates.  All he had to do was avoid gaffes and showcase the chops and he was a shoe-in to win whatever few chips were on the table tonight.  He did that and he won a few chips.

But I think Mitt threw away a great opportunity to lock up his identity as the GOP's clear best candidate.  Worse, the fumble occurred when he (partially) reversed what I've previously stated was my favorite Romney policy position.  During his CPAC keynote, Mitt vowed not only to fight to make the Bush investment income tax cuts permanent, but to do him one better and lower the tax rates on dividends and capital gains from 15% all the way to 0%.

Fabulous.  No single policy change would be more beneficial to every stratum of the American economy.

Tonight, during the "down-the-line" question about tax cuts, Mitt repeated this policy, but he limited it to "lower income Americans" (or "low and middle income Americans" - I guess I shouldn't use quotes given that I don't remember the exact phrasing, but that was the gist).

That may hold populist sway, but it's objectively a worse policy.  Worse for everyone.  Including low and middle income Americans.  The greatness of the investment income tax cuts lies in the economic growth they engender.  Another big helping of those cuts would be a tremendous boon, making our economy more robust, more flexible, and more sustainably competitive in the global capital and labor markets.

Better yet, these extra growthy tax cuts pay for themselves, just as Art Laffer predicted and as we've seen since 2003.  So there's truly no good reason - truly no conceivable, rational reason - to offer them selectively, based on income bracket.

Now... for a little self-soothing.

These were rapid fire questions and candidates clearly didn't have a lot of time to deliver comprehensive answers.  It's certainly possible that Mitt's position on investment income tax cuts hasn't changed since CPAC - that he still advocates elimination of capital gains and dividend income taxes for everyone, and that it was simply a more palatable talking to point to identify that this will be a great thing for low income Americans (which indeed it will).  I'll be interested to see the transcript to see exactly how he put it - whether he does seem to explicitly exclude higher income bracket taxpayers, or whether what he said might've been part of a longer answer or a broader policy on which he simply didn't have time or inclination to expound, in this very accelerated format.

I do hope that's the case, but lo, my heart is heavy at the possibility that it's not.  Make no mistake - eliminating the tax for all income brackets is not the more desirable policy because it lets wealthy people keep more money.  It's more desirable because the incredible growth-fueling effect of these cuts, which significantly benefit us all in meaningful and long-term ways (as compellingly illustrated last month), will largely be absent, if the cuts only apply to lower income individuals.

For his part, Mike Huckabee seemed to pick up Romney's possible fumble and explicitly espoused nixing the tax for everyone.  For all the grief Huckabee takes from the Club for Growth, he might've been the most ardently pro-growth candidate on stage tonight.