Jonathan Chait complains about the supply-side features of the plan and criticizes “reform conservatives,” including me, for our “acquiescence” to provisions that would enrich the already-rich. Acquiescence? I’m enthusiastic about those provisions.
Bob Stein originated the basic idea of the Lee-Rubio plan, and I first wrote about it in NR in 2005. I talked then about cutting the top income tax rate, moving to a two-rate structure, and reducing the double taxation of saving and investment. Stein wrote up an updated version of his idea in National Affairs in 2010. The current proposal differs in some respects from those earlier ones, but the basic outline is the same.
Future versions may include further revisions that leave that basic outline in place. Take, for example, the plan’s treatment of capital gains. Lee-Rubio takes the tax on them to zero. I favor that policy as an ideal matter, but proponents of the plan may end up having to retreat on that issue at some point. And as I said the other day, the plan should either be modified or coupled with entitlement reforms to reduce its impact on the deficit. But if the plan is to keep its basic structure, many rich people will get large tax cuts from it.
And that’s ok as far as I’m concerned. The point of the plan has never been to avoid cutting taxes for the rich, or to avoid criticism from liberals for cutting taxes for the rich. It has always been to improve the tax code in a way that offered tangible benefits to large numbers of middle-class voters. Chait writes, “Perhaps the reform conservatives have capitulated completely in the name of party unity. Or maybe they were misunderstood from the beginning.” Maybe! But we have not exactly been keeping our ideas a secret.