Newt Gingrich and I go a long way back, to the beginning of the Reagan supply-side revival of free-market capitalism. I thought we shared that philosophy. But his attacks on Bain Capital — using the class-envy language of the left against capitalist success — are a great disappointment to me.  Newt resumed that Bain attack when he said in Florida that Mitt “lives in a world of Swiss bank accounts and Cayman Island accounts and automatic $20 million income for no work.”

Romney earned his income. And his successful investments all represent market opportunities. However, once again I fear that Newt is all too willing to sacrifice his principles for political expediency in the heat of the campaign. Below, in two parts, is my interview with Gingrich which aired on Thursday night’s Kudlow Report.

President Obama’s proposal to increase taxes on the rich is “designed to come at me,” GOP presidential contender Mitt Romney told me this morning.

In his State of the Union speech Tuesday night, Obama proposed a minimum 30 percent tax rate on Americans earning more than $1 million a year. The proposal — known as the “Buffett Tax” after Warren Buffett famously said his secretary pays a higher tax rate than he does — was a key part of the president’s populist push for “fairness” in his speech to the nation.

The plan is “designed to come at me if I’m the nominee,” Romney said in an interview that will air tonight on The Kudlow Report. “If I happen not to be the nominee, he’ll still take the 99-versus-one attack. He’s really trying to divide America.”

Romney, who gave a glimpse inside his personal fortune on Tuesday by releasing his U.S. tax returns, paid an effective tax rate of 13.9 percent in 2010 and expects to pay a 15.4 percent effective rate when he files his return for 2011.

Those rates are far below the top income-tax rate on wages, which is 35 percent, because the U.S. tax code favors capital gains and other investment income by taxing them at 15 percent.

“The question is whether we’re going to eliminate the capital-gains tax break,” Romney said. “So if you say we’re going to raise that dramatically, you’re going to choke off a lot of the capital that goes into creating new enterprises and creating jobs. It’s the wrong way to go.”

Romney said Republicans are not all about the rich. “I’m fighting to help middle-class Americans get better jobs and better incomes,” he told me. “People who have been successful understand the path to success — we want everyone to enjoy success in America.”

Tune in to tonight’s Kudlow Report on CNBC (7:00 p.m., ET) to see the entire interview.

Senate Minority Leader Mitch McConnell (R., Ky.) told me on Monday night’s Kudlow Report that President Obama shouldn’t expect a lot of cooperation from Republicans after he outlines his goals for 2012 during the State of the Union address tonight.

“With the Obama economy established now . . . unemployment is still at 8.5 percent,” McConnell said. “It didn’t work, and we’re not interested in doing more of the things that don’t work.”

Obama is expected to use his State of the Union address to call for higher taxes on the rich, among other things. And while it sounds like more gridlock ahead in Washington, McConnell puts the blame squarely on the president. He said when Republicans wanted to tackle tax reform and entitlements last year, Obama went AWOL on his bus tour. McConnell expects more of the same this year. 

“He was not involved whatsoever,” McConnell said. “So I’m not optimistic, frankly, that in an election year that he’s likely to be any more engaged than he was last year.”

What’s more, McConnell thinks the logjam in the nation’s capital is part of Obama’s agenda.

“That’s his strategy . . . to demonize Congress, to complain because he can’t continue to get everything he wants, like he did the first two years,” he said. “It’s all about his reelection and not about the country.”

One thing McConnell thinks will get done is an extension of the payroll tax cut, which was extended for only two months in December when Congress couldn’t come to an agreement.

“We’ll be back at [it] trying to figure out how to do that for the balance of the year and how to pay for it,” he said. “We don’t want to add to the deficit.”

Watch the full interview here:

Let me build on Charles Krauthammer’s great Friday column, “The GOP’s Suicide March.” Krauthammer argues that just as President Obama’s class-warfare, soak-the-rich mantra started lagging in the polls, some Republicans on the campaign trail started making the case that Mitt Romney’s Bain Capital was involved in nothing more than vulture capitalism, looting companies, and destroying jobs. Keeping class envy alive.

I’m not going to name names, because everybody knows who these Republicans are. Instead, I want to go positive, and commend Mitt Romney himself. Romney did his best in the second South Carolina debate to fight for free-market capitalism and Adam Smith, and against the spread of Obama-style crony capitalism and class envy. 

Read my full column here. 

Might a strong Newt Gingrich debate performance tonight trump the ABC Nightline interview with Newt’s ex-wife Marianne? Remember, the debate comes before Nightline. And the roughly five million to six million people who watch the debate will be a lot more than the roughly two million folks who turn on Nightline. Plus, the Nightline crowd is largely liberal, and these viewers are not going to favor Newt Gingrich.

I’m not saying the ABC Brian Ross interview with Marianne isn’t something. But I’m not sure how important it really is.

Here’s what’s more important: Newt has opportunities in the debate tonight to push his Reagan 2.0 supply-side tax-reform plan. If he stays on message about growth, jobs, and prosperity, he can point to Mitt Romney’s more timid tax-reform plan.

Plus, Newt needs to explain how the numbers work both for his 15 percent flat tax and his plan for Social Security personal accounts. Growth is great, but we also have this problem called the budget deficit. Newt needs to explain.

Mitt Romney has opportunities tonight also. He needs to announce an early release of his tax returns. He also should explain that his investment income, which is taxed at a 15 percent effective rate, is also taxed at the corporate level. So in fact, Mitt is paying a combined 45 percent tax rate on his income.

And while he’s at it, Mitt should unveil (unleash?) his own bolder tax-reform plan. Most people agree that Mitt has the business experience and the better understanding of how the economy works. But he needs a bolder solution. Tonight could be the night.

And while he’s at it, Mitt should give a more detailed defense of both the successes and failures of Bain Capital. Details matter. And perhaps he can aggressively tell folks how a Bain-turnaround approach is exactly what’s needed for that troubled and near-bankrupt company, U.S. Government, Inc.

Finally, both Newt and Mitt should take on the cronyism in Washington. They should describe how they would end corporate welfare; how they would remove the costly and unnecessary deductions, exemptions, and carve outs in the tax code; and how they would get rid of all the government subsidies to big business for energy, exports, and agriculture (and ethanol). Changing Washington’s culture of cronyism is a key path to tax reform, deep spending cuts, and deficit reduction — along with growth.

In other words, in a dead-heat race in South Carolina, both Newt and Mitt have big opportunities in tonight’s debate. 

There’s a very troubled company out there called U.S. Government, Inc. It’s teetering on the edge of bankruptcy. And it badly needs to be taken over and turned around. It probably even needs the services of a good private-equity firm, with plenty of experience and a reasonably good track record in downsizing, modernizing, shrinking staff, and making substantial changes in management. Yes, layoffs will be a necessary part of the restructuring. 

Read my full column here.