The zingers will get most of the headlines, but voters watching tonight’s fourth Republican presidential debate in Milwaukee will also get a chance to learn how the candidates plan to juice the economy and revive growth. Here’s a breakdown of how they differ on 5 key economic issues:
Taxes. All the GOP candidates want to lower the top individual tax rate, now 39.6%. Ted Cruz, Rand Paul and Ben Carson would institute a flat tax with a rate between 10% and 15%. Jeb Bush, Marco Rubio, Donald Trump and John Kasich would lower tax rates while also eliminating deductions and loopholes. Bush, Cruz, Rubio, Paul, Kasich and Trump would lower capital gains taxes. And all the candidates would sharply lower the corporate tax rate.
The catch, however, is that most of these tax plans would cost the Treasury billions and add to the national debt. Trump’s plan is the most generous to taxpayers, and therefore the most costly, with an annual price tag of about $1.2 trillion, according to the nonprofit Tax Foundation. Rand Paul’s plan would cost about $180 billion per year, with the other candidates’ plans coming between those two extremes.
Social Security. This treasured pension program for retirees will start to run short of money around 2035. How to fix that is the question, with the main choices being tax hikes or other such measures to keep benefits as they are (which Democrats generally prefer) or gradual cuts in benefits to keep spending in line with revenue. Bush, Cruz, Rubio, Kasich and Paul would protect Social Security by gradually raising the retirement age beyond the current threshold of 67 for people born after 1959, and limiting benefits for wealthier seniors. Cruz would complement that by shifting some portion of the federal pension to a private account the retiree would manage. Trump, Carson and Carly Fiorina haven’t announced a formal plan for Social Security. Many fixes for Social Security can be applied to Medicare as well, except the federal health program for seniors is likely to start running short of money a few years sooner than Social Security.
Immigration. This is an economic issue because immigrants — both legal and illegal — are an important part of the labor force and tougher restrictions on them could raise costs for businesses. All the main GOP candidates except Bush and Fiorina want to build a wall along the U.S.–Mexican border as a first priority. Carson, Cruz, Paul and Trump want to end the practice of birthright citizenship, which holds that anyone born in the United States is automatically an American citizen. And Cruz and Trump oppose any kind of legal status for roughly 11 million illegal immigrants in the United States, insisting they should all be kicked out. The other six candidates favor a path to citizenship or some other form of legal status—but only after the holes in the southwest border have been plugged.
Healthcare. Business and families alike keep spending more on healthcare, making this a top economic issue as well. All the GOP candidates would start by repealing President Obama’s huge health-reform law — but they disagree on what to do next. Rubio has proposed a kind of Obamacare-lite that would offer federal tax credits to help people pay for insurance, but avoid any mandates such as those integral to Obamacare. Bush favors state (rather than federal) subsidies and a government program to provide last-resort catastrophic care. Carson favors “health savings accounts,” with some government backing to pay for health expenses, while Trump wants to see more competition among insurers, to lower costs. Aside from their shared opposition to Obamacare, Republicans' divisions on healthcare are probably greater than on any other issue.
Jobs. Given the lackluster economy and widespread worry about the lack of good jobs, this topic has gotten less attention from the candidates than it probably deserves. Most of the candidates say tax reform is the top way to generate better jobs that pay more, especially lower corporate taxes that, in theory, ought to lead companies to boost U.S. investment. Trump contends that tougher trade deals with China, including tariffs on cheap imports, will do the trick. Bush and others insist dialing back regulations will free companies to invest more and create more jobs. What you’re unlikely to hear from any of the GOP candidates is a plan for building roads, bridges, schools and other types of infrastructure to create jobs, a tactic typically favored by Democrats. Maybe once they win the White House.
Rick Newman’s latest book is Liberty for All: A Manifesto for Reclaiming Financial and Political Freedom. Follow him on Twitter: @rickjnewman.