From an editorial in Thursday’s Washington Post:
With much of the Republican presidential field unwilling to address budget issues, former Florida governor Jeb Bush on Wednesday released a detailed tax plan worth taking seriously.
Bush borrows heavily from the recent work of Martin Feldstein, a Harvard economics professor and Ronald Reagan’s chief economics adviser.
He would spare the deduction for charitable giving, but would cut the deduction for state and local taxes entirely, and he would limit the value a tax filer could claim from every other itemized deduction, including mortgage interest, to 2 percent of adjusted gross income. He would then cut rates significantly, with the top rate falling from 39.6 percent to 28 percent. He also would eliminate the estate tax and Social Security taxes on working seniors, and he would increase tax credits for the working poor.
Bush deserves credit for, among other things, naming real deductions he would eliminate or limit. His expansion of low-income tax credits is a long-overdue bipartisan reform that every candidate should champion. On the negative side, his total elimination of the state and local tax deduction amounts to an attack on blue states; ending Social Security taxes on working seniors would help a lot of people who don’t need the assistance; and abolishing the estate tax makes no sense at a time of rising inequality.
There’s another, gigantic catch: Bush’s plan would reduce federal revenue – a lot. An analysis from Feldstein and other economists estimates that, without accounting for any economic growth the plan might spur, the tax scheme would lose the government an astonishing $3.4 trillion over 10 years.