Why Jeb Bush is Talking About Income Inequality

It’s a new frame for his conservative economic plan.

Former Florida governor Jeb Bush speaks at the 42nd annual Conservative Political Action Conference (CPAC) February 27, 2015 in National Harbor, Maryland.
National Journal
S.V. Dáte
Add to Briefcase
See more stories about...
S.V. Dáte
April 30, 2015, 4:05 p.m.

Jeb Bush, the great-grandson of a man who made the family fortune in investment banking, is making income inequality an issue in his not-quite campaign for the presidency.

It’s a new line of attack—and one that Bush hasn’t yet supported with any policy proposals. Indeed, so far, he’s advocating the sameeconomic policies he pushed as governor of Florida: cutting taxes and rolling back regulations on industry. 

“I did my best. We had rising income for sure,” Bush told National Journal about his time in the statehouse. “And if you’re not growing the economy, you’re not going to deal with income inequality.”

Speaking Thursday at the conservative National Review Institute summit in Washington, Bush once again hit his inequality agenda. “If you’re born poor today, you’re more likely to stay poor,” Bush said. “We need to deal with this.”

(RELATED: Jeb Bush to National Review: “I Love You.” But “You’re Wrong on Immigration.”)

Bush promised that he would make those ideas a centerpiece of his campaign, should he formally become a candidate. The theme also plays prominently on Bush’s Right to Rise political action committee’s website:

“While the last eight years have been pretty good ones for top earners, they’ve been a lost decade for the rest of America,” reads a statement on the site’s “What We Believe” page. “We believe the income gap is real, but that only conservative principles can solve it by removing the barriers to upward mobility.”

But Bush already has offered hints about his economic plan—and so far, they mirror his approach as Florida governor.

“The lack of people moving up, and the fact that people in the middle are disaffected and they don’t see the system working for them is what we need to fix,” Bush said at the National Automotive Dealers Association convention in San Francisco this year. “And we can do that by tax reform, entitlement reform, regulatory reform.”

(RELATED: Jeb Bush Backs Hike in Social Security Retirement Age)

With large Republican majorities in both legislative chambers, Bush pushed through tax cuts for corporations and wealthy investors—a group that made up, with rare exceptions, the richest 5 percent of Floridians.

At the same time, Bush’s cuts to the state’s tax base shifted much of the burden of paying for schools to locally collected property taxes, which critics say disproportionately hurt middle-class homeowners and renters.

So what of Bush’s new emphasis on the “income gap?”

“That’s outrageous,” said Ed Montanaro, who during Bush’s tenure was Florida’s chief economist, a non-partisan position that answered to the GOP-controlled state legislature.

(RELATED: Marco Rubio’s Biggest Problem Isn’t Jeb Bush)

Dan Gelber, one of the top ranking Democrats in the legislature in that period and a frequent Bush sparring partner, could only manage a chortle. “You can quote the laugh,” he said.

“He was very sensitive to income inequality. He created more of it,” Gelber said.

In August 1998, during his first successful run for governor (he ran in 1994 but lost), Bush told alumni of historically black Florida A&M University: “The American dream is shattered for far too many people “¦ Too few people have confidence in capitalism.”

Upon taking office, Bush directed agencies under his control to repeal or reduce regulations. This included an effort to streamline the state’s landmark Growth Management Act that passed under Democrat Bob Graham in the 1980s. Bush’s goal was to make it easier for developers to pursue large projects. Bush also pushed through the legislature major tort reform bills, making it harder to sue corporations.

(RELATED: Republican 2016 Hopefuls Court Iowa’s “Super Volunteers”)

Speaking to the car dealers, Bush cited the high costs of litigation as one reason that large-scale investments are difficult in today’s climate.

“The standing that people have is way too broad,” he said, a reference to lawsuits that can slow down or block development projects. “The costs are way too high. The uncertainty is all too clear. And it stifles the investment that creates income increases for the middle class.”

But the issue that most directly affected Floridians’ income was Bush’s tax policy, and in that area, the richest slice of Floridians benefited the most. Bush ultimately succeeded in eliminating a tax on stocks, bonds and other financial instruments. But because savings and checking accounts, retirement accounts, and investment holdings totaling less than $60,000 for a married couple were exempt, the tax was actually borne by the wealthiest 4.6 percent of residents—those rich enough to have substantial investments outside of their 401(k)s and IRAs. In a state without an income tax, it was the only progressive levy Florida had.

By the end of Bush’s time in office, the average annual savings for the payers of this “intangibles” tax was $1,523 per household. The average annual savings for the typical Palm Beach County millionaire was nearly $8,000 per household. Nearly half of the $14 billion cumulatively slashed from Florida’s budgets during Bush’s tenure came from the elimination of this one tax.

(RELATED: How Florida’s Later, Winner-Take-All Primary Is Both Risky and Rewarding for Jeb Bush)

Montanaro was head of the Florida legislature’s Economic and Demographic Research office and chaired the panel of state economists who estimated how much tax revenue Florida could expect each year. He said there were a number of taxes Bush could have targeted that did disproportionately affect poorer Floridians—taxes on utility bills, for example, or the sales tax.

“There were other taxes he could have gone after. He just gravitated to the big wealth tax,” said Montanaro, who now teaches economics and Spanish literature at Carthage College in Wisconsin.

Gelber, who enjoyed long email debates with Bush on issues ranging from education to car booster seats, said Bush’s policies reflected his belief in the supply-side economic philosophy that helping the rich—or “risk takers” and “job creators,” as Bush calls them—ultimately helps everyone.

But that worldview, Gelber said, would do nothing to address income inequality in the United States, just as it did nothing to address income inequality in Florida. “He didn’t help that as governor. He exacerbated that as governor,” Gelber said. “Maybe we’re just not paying our low-wage workers sufficiently. How about that?”

What We're Following See More »
STARTS LEGAL FUND FOR WH STAFF
Trump to Begin Covering His Own Legal Bills
1 days ago
THE DETAILS
DISCUSSED THE MATTER FOR A NEW BOOK
Steele Says Follow the Money
1 days ago
STAFF PICKS

"Christopher Steele, the former British intelligence officer who wrote the explosive dossier alleging ties between Donald Trump and Russia," says in a new book by The Guardian's Luke Harding that "Trump's land and hotel deals with Russians needed to be examined. ... Steele did not go into further detail, Harding said, but seemed to be referring to a 2008 home sale to the Russian oligarch Dmitry Rybolovlev. Richard Dearlove, who headed the UK foreign-intelligence unit MI6 between 1999 and 2004, said in April that Trump borrowed money from Russia for his business during the 2008 financial crisis."

Source:
BRITISH PUBLICIST CONNECTED TO TRUMP TOWER MEETING
Goldstone Ready to Meet with Mueller’s Team
1 days ago
THE LATEST

"The British publicist who helped set up the fateful meeting between Donald Trump Jr. and a group of Russians at Trump Tower in June 2016 is ready to meet with Special Prosecutor Robert Mueller's office, according to several people familiar with the matter. Rob Goldstone has been living in Bangkok, Thailand, but has been communicating with Mueller's office through his lawyer, said a source close to Goldstone."

Source:
SPEAKING ON RUSSIAN STATE TV
Kislyak Says Trump Campaign Contacts Too Numerous to List
1 days ago
THE LATEST

"Russian Ambassador Sergey Kislyak said on Wednesday that it would take him more than 20 minutes to name all of the Trump officials he's met with or spoken to on the phone. ... Kislyak made the remarks in a sprawling interview with Russia-1, a popular state-owned Russian television channel."

Source:
“BLOWING A SURE THING”
Sabato Moves Alabama to “Lean Democrat”
2 days ago
WHY WE CARE
×
×

Welcome to National Journal!

You are currently accessing National Journal from IP access. Please login to access this feature. If you have any questions, please contact your Dedicated Advisor.

Login