It’s long been clear that Donald Trump’s rants against illegal immigration have pulled at least some of his Republican rivals to the right. But the GOP frontrunner’s recent populist turn might be dragging them back to the left—ever so slightly—on economic policy.
Just look at Jeb Bush’s tax plan, which he released on Tuesday evening. Overall, the proposal is fairly standard conservative fare: He tries to simplify the code by collapsing seven individual income brackets into three, slashing the top rate to 28 percent from nearly 40 percent and eliminating a bunch of popular deductions to pay for it. Bush also proposes to cut corporate taxes, on the grounds that a high rate on businesses encourages companies to invest and create jobs elsewhere. The basic outlines of the plan are not all that different from Mitt Romney's platform in 2012, or the benchmarks that Republicans in Congress have supported in their annual budget proposals for years.
But one part of the Bush—er, Jeb!—tax plan stands out: “We will treat all non-investment income the same, so unless you stake capital in an investment, you won’t be able to claim the capital-gains tax rate on your market gains,” he wrote in a Wall Street Journal op-ed on Tuesday. Bush here is calling for the elimination of the so-called “carried-interest loophole,” a provision under which hedge-fund managers in particular can escape millions of dollars in taxes by claiming the lower capital-gains rate, which is capped at 20 percent, rather than the 39.6 percent at the top of the income brackets for their cut of money made for other people in the market. Democrats outside of New York have long demanded this change, but lawmakers in both parties who rely on campaign contributions from Wall Street have kept the loophole in place for years.