The WSJ’s Taxing Arguments

by Andrew C. McCarthy

I’m trying to understand the Wall Street Journal editorial’s comparison this morning between Romney and Santorum on corporate taxes. The editors take Rick to task for “rarely talk[ing] about his larger economic agenda, other than to stress his desire to ‘revive manufacturing.’” This, the editors imply, compares unfavorably to Mitt’s emphasis on the economy — notwithstanding that the Journal is singularly unimpressed by Mitt’s overall timidity, his lack of “ambition” when it comes to growth, his “trivia” ridden 59-point jobs plan, and “his refusal to rule out a value-added-tax[.]”  

But what seems really confusing is the Journal’s argument on corporate taxes. The editors are down on Santorum’s disparate treatment between manufacturing and other sectors — from the current punitive 35 percent rate, he’d cut the former’s rate to zero and the latter’s “only to 17.5 percent.” Now I admit to sympathizing: in my mind, there should be no corporate tax since it only gets passed along to consumers anyway, and I’m instinctively averse to government central plans that rig the playing field in favor of some producers over others. But that said, the Journal does not mention Romney’s position on corporate tax, so you’re left to wonder how he compares. According to this Forbes op-ed by Paul Hoffmeister, though, Romney’s plan is to cut the corporate rate by only 10 percent (i.e., to 25 percent) for all businesses.

Am I missing something? Even if you don’t like the unequal treatment, wouldn’t we be better off (from the standpoint of competitiveness, growth, and employment) with most businesses paying only 17.5 percent and the rest paying zero than with every business paying 25 percent? Is there something in Mitt’s 59-point plan that makes a better case for him on this?