Last week, the Huntsman campaign released an alternative to the President’s soon-to-be-released jobs plan. The plan includes four broad components including: 1) tax reform, 2) regulatory reform, 3) energy independence, and 4) free trade.
I broadly agree with most of Huntsman’s proposed policies. That said, I would fine tune some of his proposals.
The bulk of Huntsman’s tax reform package focuses on lowering tax rates and simplifying the tax code. I broadly agree with both. Huntsman’s tax code simplification focuses on lowering income tax rates to three progressive tiers of 8%, 14%, and 23%, respectively. To make his plan revenue neutral, he proposes eliminating all deductions and credits.
I would amend the word “all” to “most”, as eliminating certain tax credits/deductions could actually harm the economy in the short-term, particularly in ensuring a housing recovery. The specific deduction to which I am referring is the mortgage interest deduction. Eliminating this deduction would reduce the incentive for people to purchase a home. As fewer people purchase homes, housing prices would continue to languish. In turn, consumers would continue to rein in spending, because the negative wealth effect of depressed housing prices.
While I broadly agree with Huntsman’s proposals to rein in the excesses of independent agencies like the NLRB and, sometimes, the EPA, I disagree with totally repealing Obamacare and the Dodd-Frank Bill. While I agree that both pieces of legislation are job-killing, and ultimately increase prices for consumers, I think Huntsman should at least propose alternative legislation to replace these two policies, while retaining their better feature. For instance, he should provide an alternative for healthcare that contains the best of Obamacare (e.g., individual mandate, and permitting Medicare to negotiate for drug prices); gets rid of inane provisions, for instance, that require restaurants to provide healthcare for all of their hourly employees; and includes provisions that actually will help reduce healthcare costs, such as tort reform.
Energy Independence and Free Trade
I broadly agree with all elements of Huntsman’s Energy Independence and Free Trade policies. That said, I would add more provisions for energy independence. However, I will save those prescriptions for my forthcoming book.
Despite some of its flaws, the Huntsman Plan is likely the best one put forward thus far. Hopefully, the President offers something better.
That said, I’m not optimistic.