Bush Would Revisit 'Voodoo Economics'

WASHINGTON -- His father had a term that could be applied to Jeb Bush's tax plan: "voodoo economics," the unproven notion that massive tax cuts for the rich will spur enough economic growth to justify the budgetary hit.

But there's an even-more fundamental question underlying Jeb Bush's proposal to cut taxes by -- depending on how much voodoo you practice -- between $1.2 trillion and $3.7 trillion over 10 years: Why?

What in the country's current budgetary state suggests that Americans are taxed too much, and to such a degree as to justify the increased deficits or painful spending cuts that would ensue?

Recall that Mitt Romney's tax proposal, to cut individual tax rates without losing revenue or making the code less progressive, was fanciful, but it was at least based on the notion that the change would be revenue neutral -- that is, enough deductions and credits would be curtailed to offset the loss created by lowering rates.

To put the magnitude of Bush's proposed cuts into some perspective, it would -- even under the kindest, most voodoo-y interpretation -- reduce overall federal revenue by 3 percent over the decade.

And, by the way, history and responsible economic modeling (the Treasury Department, the Joint Committee on Taxation) offer little basis for crediting the rosy scenarios, the rosiest of which ladles in a dollop of regulatory relief to jack up the promised growth rates. But the Committee for a Responsible Federal Budget, analyzing the Bush plan under ordinary, static budget rules, says it would drain 8 percent of revenue over the following decade.

To start, though, I interrupt this critique with some words of praise:

First, in this appallingly substance-free campaign, that Bush has a detailed tax reform plan at all, unlike most opponents.

Second, that some of his policies compassionately and smartly enlist the tax code to help low-income workers, expanding the earned income tax credit for those without children and nearly doubling the standard deduction, thereby reducing the number of households who owe any income tax. So much for Romney's lament about the 47 percent who don't pay taxes.

Third, that Bush takes some aim at unwarranted tax breaks for the wealthy. He would eliminate the carried-interest loophole that lets hedge-fund managers pay much lower rates, although the significance of this change is more symbolic than budgetary. He would cap most itemized deductions at 2 percent of income.

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