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GOP rivals focus on flat taxes, government

Published: Saturday, Oct. 29 2011 11:12 p.m. MDT

FILE - In this Oct. 11, 2011 file photo, Republican presidential candidate, Rep. Ron Paul, R-Texas, listens at a presidential debate at Dartmouth College in Hanover, N.H.  (Associated Press) FILE - In this Oct. 11, 2011 file photo, Republican presidential candidate, Rep. Ron Paul, R-Texas, listens at a presidential debate at Dartmouth College in Hanover, N.H. (Associated Press)

WASHINGTON — On jobs and taxes, the top Republican presidential rivals are locked in a fierce game of one-upmanship. They're all trying to outdo each other in offering the boldest economic plan for the campaign to unseat President Barack Obama next November.

Despite some notable differences in the blueprints, they all are built around the central theme that Obama's stimulus programs haven't worked and his job-creation record is dismal. Example No. 1: Unemployment is holding at a painfully high 9.1 percent.

"We knew ultimately that the 2012 election was going to be a big referendum on the president," said Douglas Holtz-Eakin, former director of the Congressional Budget Office who was the chief economic adviser to Arizona Sen. John McCain's 2008 presidential campaign. "But Republicans also have to say what they would do. It's not enough to say we don't like what's going on."

Texas Gov. Rick Perry teased rival Herman Cain — "I'll bump plans with you, brother" — when both rolled out ambitious proposals for a single-rate flat tax. That's a concept hailed by numerous Republicans and some Democrats for its simplicity, yet it never has managed to attract much congressional support. Former Massachusetts Gov. Mitt Romney is the lone major GOP contender not calling for a flat or flatter tax.

FILE - In this Oct. 13, 2011 file photo, Republican presidential candidate, Rep. Michele Bachmann, R-Minn. speaks in Denison, Iowa.  (Associated Press) FILE - In this Oct. 13, 2011 file photo, Republican presidential candidate, Rep. Michele Bachmann, R-Minn. speaks in Denison, Iowa. (Associated Press)

The 2012 contenders also are serving up a platter of familiar conservative fare: calls for deep spending cuts, reduced government regulation and an emphasis on private enterprise as the true engine of job growth and prosperity.

The plans underscore the party's attempt to respond to the biggest voter concerns and capitalize on what they see it as Obama's chief vulnerability, the still shaky recovery. The candidates claim their various plans would help create millions of private sector jobs; just how is not always clear.

With polls showing that most people support increasing taxes on the wealthiest households, as Obama and Democrats are proposing, the GOP flat-tax plans would largely end up as a boon to the wealthiest, independent analyses suggest.

The tax debate coincides with spreading protests, inspired by the Occupy Wall Street movement, against economic inequality. The nonpartisan Congressional Budget Office recently reported the top 1 percent of American earners doubled their share of national income over the past 30 years, to 20 percent.

FILE - In this Oct. 24, 2011 file photo, Republican presidential candidate, former Massachusetts Gov. Mitt Romney greets supporters outside the State House  in Concord, N.H. (Associated Press) FILE - In this Oct. 24, 2011 file photo, Republican presidential candidate, former Massachusetts Gov. Mitt Romney greets supporters outside the State House in Concord, N.H. (Associated Press)

Some of the GOP plans show depth, complexity and sophistication, Holtz-Eakin said. Not every economist is as charitable or sees the GOP offerings as workable.

"I don't think any of the plans can be taken too seriously as actual policy," said Bruce Bartlett, who held top economic posts in the Reagan and George H.W. Bush administrations.

"The Republican goal is to nominate the person who is the most committed, most articulate in terms of the Republican philosophy. What they're competing for is who best represents that core philosophy and articulate it in a way that the base finds satisfying," Bartlett said.

No matter that some GOP dogma, such as an insistence that cuts in business taxes and government regulation will spur private-sector job growth, "is economic nonsense," Bartlett said.

All the GOP rivals would pare federal regulations.

FILE - In this Oct. 28, 2011 file photo, Republican Presidential candidate, Herman Cain campaigns in Talladega, Ala. (Associated Press) FILE - In this Oct. 28, 2011 file photo, Republican Presidential candidate, Herman Cain campaigns in Talladega, Ala. (Associated Press)

Rep. Michele Bachmann, R-Minn., would kill the Environmental Protection Agency. Romney is proposing a 10 percent cut in the federal workforce.

Economists generally agree the shortage of jobs isn't caused by government overregulation but by a lack of consumer demand. A recent Labor Department survey showed that less than 1 percent of all layoffs in the past four years have been attributed by employers to government regulation.

With consumer spending driving two-thirds of the U.S. economy, those without jobs have little money to spend. Many with jobs fear losing them, or their houses are worth less than their mortgages, so they have little spare cash or borrowing ability.

Killing off Obama's health care overhaul is a common feature of the GOP plans. So, too, is a proposal to offer American companies a chance to bring money generated overseas back into the U.S. without being taxed. But studies have shown that a similar repatriation "holiday" in 2004-05 had little effect on job growth.

FILE - In this Oct. 25, 2011 file photo, Republican Presidential candidate, Texas Gov. Rick Perry speaks in Gray Court, S.C. (Associated Press) FILE - In this Oct. 25, 2011 file photo, Republican Presidential candidate, Texas Gov. Rick Perry speaks in Gray Court, S.C. (Associated Press)

Some Republicans go further than others. For instance, Bachmann says she would consider allowing oil and gas exploration in the Florida Everglades.

On taxes, Romney would make incremental changes and move later to a simpler system. For now, he would extend Bush-era tax cuts, lower the 35 percent corporate tax rate to 25 percent and exempt investment income for those earning less than $200,000. He would extract more U.S. oil, coal and natural gas, expand trade pacts and cut federal spending.

Rep. Ron Paul's plan is the most radical. The Texas Republican, would scrap the income tax entirely. He would make ends meet through excise taxes, tariffs, and a smaller government. He would abolish the Internal Revenue Service and the Federal Reserve.

Cain, the former Godfather's Pizza CEO who has replaced Romney as the GOP front-runner in some recent polls, repeatedly pushes his "9-9-9" tax plan that would cut personal and corporate tax rates to 9 percent and impose a new 9 percent federal sales tax.

FILE - In this Oct. 13, 2011 file photo, Republican presidential candidate, former Utah Gov. Jon Huntsman speaks in Greenland, N.H.  (Associated Press) FILE - In this Oct. 13, 2011 file photo, Republican presidential candidate, former Utah Gov. Jon Huntsman speaks in Greenland, N.H. (Associated Press)

Perry's plan would give taxpayers the choice of paying at a flat rate of 20 percent or adhering to the current tax structure. He would preserve deductions for mortgage interest, charitable donations and state and local tax taxes for households earning less than $500,000.

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