That’s some nerve

Technically, he's unemployed.

Tyler and I have written plenty of positive things about Jon Huntsman on the blog. We gave him credit for [occasionally] standing up to his party’s most extreme elements during his presidential bid. We even waxed poetic about the demise of his campaign.

None of that means that Huntsman is above rank opportunism. On Friday Chris Cillizza of the Washington Post quoted a Huntsman “family friend” that the former ambassador lobbied the White House for the open World Bank post. Huntsman’s daughter confirmed that he even discussed the matter with Senate Majority Leader Harry Reid (D-NV), though there was disagreement over who initially brought up the topic and what was said.

I don’t like to pass judgment on rumor and innuendo, but Huntsman has a long history of pulling well-hung strings to get prominent jobs. His father, the billionaire Republican donor Jon Huntsman, Sr., was largely responsible for Huntsman, Jr.’s posts in the H.W. Bush administration, including his appointment as ambassador to Singapore, as well as funding his state and national campaigns. The most notorious example, however, was the clash of the scions that pitted the Huntsmans (Huntsmen?) against the House of Romney for the leadership of the 2002 Salt Lake City Winter Olympics. Furious behind-the-scenes lobbying efforts by both families ultimately resulted in Mitt Romney’s selection and subsequent reputation for “rescuing” the Games. (Hutsman’s consolation: being named CEO of his father’s Fortune 500 company.) After it became clear that Romney was going to be the choice but before it was announced, Huntsman withdrew his name from consideration — similar to his supposed track-covering once the President nominated Jim Kim to head the World Bank.

I don’t have a problem with Huntsman personally or — despite our disagreements — politically. It deserves mention that he has served capably in every position that he’s held, and I have no doubt that he would have run the World Bank competently. But like him or not, Huntsman’s near-effortless rise through embassies, boardrooms, and the governor’s mansion exemplify the entitlements granted by money and connections in our political system. [It would take an even rarer type of entitlement to ask your former boss for another job (a promotion, even) after resigning from your previous one to spend the better part of a year trying to take his.] I don’t begrudge Huntsman, Romney, or any of the myriad Democrats — a few named “Kennedy” come to mind — with financial and political advantages for using them. But I do think those details are relevant to the conversation about who our leaders are and how they achieved their status.

For the record, the White House says Huntsman was never under consideration for the job.

An Elegy for the Huntsman Campaign

On Monday, my favorite candidate and every Democrat’s favorite least hated GOP candidate, Jon Huntsman, announced that he would suspend his campaign ahead of the South Carolina primary. Despite a strong conservative record as governor and two prominent ambassadorships, Huntsman never gained traction among the Republican base due to his apostasies on global warming (it’s happening), evolution (makes sense), and gay rights (they should have some.)

A standard political obituary wouldn’t do his memory justice, so — in a brief interlude from our typical style — Jake and I decided to honor Huntsman’s dashed presidential hopes through verse.

Jake, smugly basking in the Republican Party’s reflexive rejection of anybody or anything mildly reasonable (his words), felt a limerick was most appropriate:

There was a rich man from Beijing,

Who chastised his party’s right wing.

We all knew he was dead,

After five words he said:

“I believe in global warming.”

I, feeling a bit more solemn, chose to model my elegy on “O Captain! My Captain!” by Walt Witman (click the title to read):

O Candidate! My Candidate!

Correction

In previous posts, those of us here at the blog have referred to Jon Huntsman as a fluent Mandarin speaker. Well, it no longer appears like that is the case:

When asked on the Colbert Report to speak Chinese, Huntsman spoke one sentence and then “translated” his words as “I just said you ought to consider being my running mate for vice president.” The studio audience roared in approval. Yet in reality, Huntsman’s mangled Chinese would translate as: “I really want you to do my vice-America president.”

We regret the error.

Reaction to Jon Huntsman’s Jobs Plan – Tax Reform Section

Yesterday Jon Huntsman released his Jobs Plan in a speech at a metal fabrication plant in Hudson, New Hampshire and I thought I would offer a little reaction and commentary on this economic plan (I think it’s more of comprehensive economic plan than a jobs plan).

Since Huntsman breaks down his plan into four parts (comprehensive tax reform, regulatory reform, energy independence, and free trade) I will analyze it in four parts. Starting today with his Tax Reform section.

The first prong of Jon Huntsman’s three-pronged tax reform plan essentially adopts the recommendations of the Fiscal Commission headed by Alan Simpson and Erskine Bowles (see page 29 of this PDF from the Commission). Lower the rates and broaden the base. The candidate declares that this will be a revenue neutral adjustment that makes the tax code fairer and less cumbersome. Obviously an important component of this proposal will be which credits and deductions are allowed to stay and which are nixed – the plan in its current incarnation does not address this question. Truthfully the country could probably afford five tax brackets (two additional brackets on wealthy earners), but this is a fair start towards a more efficient tax system.

After the personal income tax code reform proposal, I think Huntsman’s tax plan becomes a little bit less than forthright in that he no longer references the revenue impact of his proposals, which could lead some to believe the entire tax proposal is revenue neutral given the only mention of revenue in the plan says so; actually the overall tax plan is deficit increasing. The individual component may not increase the deficit, but the rest of plan absolutely does. That does not mean the proposals are bad or good, they are just deficit increasing. It is a matter of fact.

Separate from broadening the base and lowering the rates, Huntsman calls for the abolition of the Alternative Minimum Tax (AMT). Most everyone agrees that this tax at least needs reforming. “Bracket creep” has led to more and more middle class Americans being subject to the AMT, which was never the intent of the provision. If the aforementioned tax reform effectively made the tax code fairer, it is possible that repeal of the AMT would have less impact. Other options for the AMT have been proposed and involve replacing the AMT with a better-designed system to ensure fair tax treatment of middle class earners (the Tax Policy Center made a good recommendation a few years ago).

The second prong of the Huntsman Plan’s tax section deals with corporate taxes. He proposes reducing the corporate tax from the second-highest in the world at 35% to the OECD average of 25%, instituting a territorial tax system, and allowing repatriation of corporate profits. On the surface, these are all deficit increasing proposals. First, because the proposal does not recommend restructuring the corporate tax cut but only reducing the rates, one of the central problems with the corporate tax code will remain; many multinational corporations pay extremely low tax rates compared to their domestic counterparts (this article explains the “Double Irish” and “Dutch Sandwich” techniques utilized by Google to lower its effective tax rate). The tax code should be reformed to help prevent some of the pricing arrangements that allow expatriation of profits. Lowering the corporate rate would certainly help in this process by reducing the incentive to relocate earnings, but it will not solve the problem. Territorial taxation (the second element of corporate tax reform for Huntsman) will not address revenue concerns or tax deferral schemes used by corporations; in fact it probably makes both problems worse. Conversely, it could lead to some foreign company’s relocating their headquarters to the United States, but the U.S. doesn’t seem to have a problem getting big companies, it just has a problem getting taxes from them. Repatriation of corporate profits, if done well, could be the first step in a broader plan to bring U.S. earnings back to the U.S. and broaden the corporate tax base; still, it would need to be coupled with overall corporate tax code reform in order to be effective and deficit neutral or improving.

The final section regarding tax policy involves removing the capital gains and dividends taxes. The rationale Huntsman espouses is that this money was taxed as income before and taxing the gains amounts to double taxation. I don’t buy that. It doesn’t really make sense. If we want to encourage savings and investment, taxing these gains at a lower rate should suffice of course this means taxing the income of rich Americans at a lower rate.

The Huntsman plan for taxes has some good parts (tax reform for individuals and implied corporate tax reform) and some bad parts (not taxing capital gains at all). The plan surprisingly does not address payroll tax issues which is certainly an important part of job creation.

Overall I’m still left wishing Jon Huntsman would stand out from the field of typical GOP talking points a little more.

At some point in the near future I will address the rest of his jobs proposal; tax reform was the main component and seemed worthy of its own post.