[Posted by Karl]
Rick Santorum is looking to distinguish himself from his GOP rivals, particularly Mitt Romney, on taxes:
If there’s any doubt that insurgent GOP presidential candidate Rick Santorum is gunning for the mantle of blue-collar conservative, just take a gander at his tax plan: Families with children would receive triple the current tax exemption, and companies that manufacture goods in America would not be taxed at all.
The populist proposals, which set him apart from his rivals, are key components of Santorum’s “faith, family and freedom” agenda that resonated in Iowa and which he now hopes will draw blue-collar voter support in New Hampshire.
“I believe in cutting taxes. I believe in balancing budgets. … But I also believe we as Republicans have to look at those who are not doing well in our society by just cutting taxes and balancing budgets,” Santorum said Tuesday after coming within eight votes of front-runner Mitt Romney in the Iowa caucus.
As we will see, there’s far less difference between Santorunomics and Romneynomics than the former Pennsylvania Senator has tried to create with rhetorical jabs at supply-siders. The differences fall mostly into the two categories identified above.
First, he wants a pro-natalist tax policy in the mold of economist Jacob Stein. That’s unsurprising, given Santorum’s generally Catholic approach to public policy. It appeals directly to middle-class families, which is good campaign politics — on the surface, anyway. On closer examination, there would be budgetary and political obstacles to passing this type of proposal. Moreover, it is far from clear that this tax policy would actually do anything about falling fertility rates, which are part of human development in the modern age. That development, spurred in no small part by respecting innovation and entrepreneurial drive, may decrease fertility rates, but it also yields enormous benefits for families.
Second, Santorum supports a hugely differential corporate tax rate of 17.5 percent for all but manufacturers, who would pay zero. Again, this is unsurprising from someone campaigning as the grandson of a coal miner. Again, the surface politics are good, given the importance of working-class voters, particularly white working-class voters, to the electoral calculations of both major parties this year. However, the Tax Foundation calls it possibly the worst idea of any of the Republican candidates, for several reasons.
Indeed, the Tax Foundation gives Santorunomics a grade of “D+”. Unfortunately, Romneynomics does not grade out much better, earning a “C-” from the group. The, er, bright spot here is that either would be better than Obamanomics, which by their criteria should flunk.