The Daily Need

Jon Huntsman opens the door to ‘tax increase,’ challenges the orthodoxy of the Tea Party

Jon Huntsman, the former Utah governor and ambassador to China, is on what his campaign characterizes as a “media blitz” this week, appearing on virtually every cable news network and Sunday talk show. He’s saturating the airwaves in an attempt to revive his faltering presidential bid, which has stumbled from almost the moment it began, crowded out by better-known candidates with more money, more support and more credibility with the conservatives who comprise the Republican base.

In attempting to reclaim the spotlight, Huntsman is also taking a decidedly unorthodox approach: Tacking firmly to the political center, and aggressively confronting the conservative fire-breathers in the race — particularly Rick Perry and Michelle Bachmann. Hints of Huntsman’s new strategy emerged when he became the first, and only, Republican candidate to support the debt ceiling deal reached by President Obama and Congressional leaders earlier this month. Then he cattily declared, on Twitter no less, that he believed the science behind evolution and global warming, unlike most of his opponents.

Now, Huntsman is shaking the very ideological pillars of the modern Republican Party — and, in doing so, threatens to bring the temple of Tea Party orthodoxy crashing down on his head.

In an interview with CNBC on Tuesday morning, Huntsman said what has, until now, been anathema to the Tea Party and conservative activists: He would support closing loopholes, repealing deductions and ending “corporate welfare” as part of a comprehensive tax reform plan. When asked if those measures would constitute a tax increase, Huntsman seemed to acknowledged that they would. “That’s a tax increase, and I would invest that back into the tax code,” Huntsman said.

Of course, there’s an important caveat here that makes this position less radical than it may at first sound: Huntsman is not suggesting that he would raise revenue from tax increases in order to balance out spending cuts and reduce the deficit, as the Obama administration has suggested; Huntsman’s tax increases would be revenue-neutral, off-set by lower tax rates across the board.

Nonetheless, his position directly contravenes the absolutist strictures of the Tea Party and Congressional Republicans, who have steadfastly refused to stomach a tax increase of any kind, whether through closing loopholes or ending superfluous deductions. Huntsman’s platform opens the door to a broad range of tax reform measures that, Democrats and many economists say, could redistribute the tax burden more fairly across income classes and help stimulate the economy.

Republican 2012 presidential hopeful and former Utah Gov. Jon Huntsman speaks at a breakfast at American Legion Post 3 in Nashua, N.H., Saturday, August 13, 2011. Photo: AP Photo/Cheryl Senter

Under a Huntsman administration, for example, Congress might end vast subsidies for oil companies, including tax breaks for exploration and credits for ethanol refinement that total up to $100 billion in lost revenue over 10 years. Ending “corporate welfare,” as Huntsman indicated, might also include bringing offshore accounts under the jurisdiction of the U.S. tax code. American corporations use the offshore accounts to shield their profits from U.S. income taxes, and many companies, such as ExxonMobil, end up paying little or no corporate income tax at all. The Congressional Research Service estimates that closing the offshore loophole could net as much as $60 billion a year in revenue.

Then, of course, there are the quirks in the tax code that allow wealthy hedge fund managers to pay only 15 percent of their income in taxes, rather than the 35 percent they would normally pay; owners of second homes to write off their mortgage payments as deductions; and allow day traders — or, less charitably, speculators — who gamble on the prices of commodities to pay only 23 percent of their capital gains in taxes rather than the standard 35 percent most other short-term investors pay.

The point is that Huntsman’s choice to stray from conservative orthodoxy on this issue, while not terribly radical, nonetheless opens up a wide range of new policy solutions to deal with the nation’s widening wealth gap, lagging economy and spiraling debt crisis. None of these options were considered even remotely tolerable by GOP leaders during the “crisis” over the debt ceiling, and it’s unclear whether any of the Republicans on the “super-committee” charged with cutting the deficit by Thanksgiving will consider measures like the ones Huntsman suggests.

Huntsman began his campaign by casting himself as the “civil” candidate in the race. While that mantle may have won him a brief flurry of admiration from the media, it left voters and journalists wondering where Huntsman actually stood on the issues. Now he has decided, as his campaign struggles for attention, to begin articulating policy positions that place him much closer to the center than any other candidate, including the candidate seen by many as his chief rival, Mitt Romney.

In fact, Huntsman’s apparent decision to cast himself as the moderate in the race also represents a shift, in a sense, in political strategy. At the outset of the campaign, the pundits decided — perhaps for superficial reasons — that Huntsman would have to undermine Romney in order to have any chance at succeeding in the Republican primary. The political class had decided that there was room for only one well-coiffed Mormon governor in the race, and that the two would have to aim their rhetorical fire at each other. Indeed, that was how Huntsman began his campaign, referring obliquely to Romney’s job-creation record and his support for health care reform in Massachusetts.

Now, however, Huntsman has reoriented himself, aiming instead for the candidates on the far right of the GOP field, Perry and Bachmann. He’s called both of them “unelectable” and accused them of occupying the “fringes” of the political spectrum. He’s warned of the dangers of being “anti-science,” referring to both Perry’s and Bachmann’s skepticism about evolution and global warming. And he accused them of displaying “zero leadership” in opposing the deal that averted a U.S. default.

In short, Huntsman is taking on the Tea Party. Or, as he put it in an interview on ABC’s This Week: “When you find yourself at an extreme end of the Republican Party, you make yourself unelectable.”

 
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