Tax Analysts Blog

Jeb Bush's Troubling Reversal on Taxes

Posted on Aug 10, 2015

The Republican debate season is underway. On August 6 the top 10 GOP candidates for president squared off in Ohio. The first contest will primarily be remembered for Donald Trump's bizarre spat with Fox News's Megyn Kelly. In 2012 the first Fox News debate saw a much more consequential moment. When asked if they would accept $10 of spending cuts in exchange for $1 of tax increases, every 2012 Republican candidate said no. Despite the passage of time, it's likely most of the 17 current GOP contenders would answer that question exactly the same way.

Until August 2, it appeared there was one large exception to that. Before announcing his candidacy, former Florida Gov. Jeb Bush said he wouldn't agree to Grover Norquist's pledge not to raise taxes, and he hinted that he would, in fact, trade $10 of spending cuts for $1 of tax increases. It is true that Bush's promise to consider a small tax increase in exchange for a grand bargain on spending is from congressional testimony in 2012, but he went out of his way earlier this year to talk about his flexibility on fiscal policy. Bush clearly was staking out a position that he thought would distance himself from the extreme partisanship that has defined President Obama's relationship with Congress.

But he seems to have thought better of that, possibly in light of Trump's continued appeal to conservative voters who will be a disproportionate percentage of GOP primary voters. At an August 2 conference sponsored by the Koch brothers, Bush flatly said no when asked if he would accept tax hikes as part of a budget deal. "We've raised taxes. What we need to be doing is entitlement reform, curbing the growth of spending, creating a high-growth scenario," the former governor elaborated.

Norquist, at least, wasn't surprised. Gloatingly, the head of Americans for Tax Reform said he had known all along that Bush wouldn't raise taxes as president. Norquist was unbothered by Bush's refusal to sign the pledge, saying his record as governor matters much more.

And Jeb's record is that of a tax cutter. He cut taxes virtually every year he was in office. Which makes his recent reversal even more troubling. Bush has proved that he isn't a Republican-in-name-only on taxes. He can't be confused with his father, former President George H.W. Bush, who famously reneged on his "no new taxes" pledge in 1990. If Jeb Bush needs to shore up his right flank on taxes, it reveals that the GOP has veered far from its positional flexibility that made the 1980s so successful for tax reform efforts.

President Reagan was willing to accept tax increases as part of grand bargains on taxes and fiscal policy. The first President Bush was too (although his fate in 1992 is a big reason Republicans are so queasy on the issue nowadays). If Republicans truly think that spending is out of control in Washington, they probably must be willing to at least listen to Democratic concerns. Even if the GOP wins the White House, Senate, and House next year, it won’t control 60 seats in the upper chamber. That means they will need at least some Democratic support. And no party will want to undertake tax reform without at least some bipartisanship.

A Jeb Bush victory in 2016 seemed like the best-case scenario for people who want some kind of broad tax reform. His retreat on a willingness to compromise is a major blow to those hopes.

Read Comments (2)

Bubba ShawnAug 10, 2015

Don't be so sure that Republicans won't control close to 60 seats in the US
Senate. But with Jeb Bush in the White House, he can and will persuade Senate
Democrats to sign onto tax reform with much lower Income tax rates.

Remember, Senator Reid is no longer going to bludgeon fellow Democrats not to
compromise with the Republicans.

Jeb Bush will make an excellent conservative Republican President.

That means lower income tax rates and putting a silver spike into the heart of
the estate tax.

edmund dantesAug 11, 2015

We've tried repeated tax increases without spending cuts under Obama. Now it's
time to try spending cuts without tax increases.

The old promise of $10 in imaginary cuts in 10 years for $1 of tax increases
today was foolish. It was sad that Jeb! fell for it once, it is good that no
one is falling for it today.

Remember, before Reagan starting accepting any tax increases he successfully
slashed the top rate from 70% to 50%. That gave him some bargaining room.

After we've cut the top tax rates by 1/3 again, I'd be willing to discuss tax
increases. Until than, the focus has to be on the astonishing level of
wasteful government spending.

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