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.”
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.”
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.
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.
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.
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?”