Rick Santorum is touting his promise to eliminate corporate taxes on manufacturers as he takes his surging presidential campaign to the Rust Belt. But that tax policy, which his campaign sees as a winner among blue-collar voters in places like Michigan, is coming under scrutiny from conservatives who are decrying it as thoroughly unconservative.
Santorum emphasizes that he would cut all corporate taxes, but as the grandson of an immigrant coal miner he holds America’s withering manufacturing sector in particularly high esteem and he sees a government role to revitalize the industry through tax incentives.
“We have to compete with manufacturers all over the world who want your job and in some cases took your job,” Santorum said yesterday at the Detroit Economic Club.
Likening it to the need for America to produce its own food and weapons, he added: “We need to have a manufacturing base in this economy. Why? Because of our national security.”
That has conservative policy analysts crying foul, while advocates for other sectors of the economy quietly gripe that they’d be effectively underwriting manufacturing under Santorum’s plan by paying a higher tax rate than otherwise needed.
“Giving a preferential rate is picking winners and losers through the tax code,” said Curtis Dubay, a tax policy analyst at the Heritage Foundation, a conservative think tank. “The goal of tax reform should be a neutral tax code.”
“This is not free-market economics, this is trying to tilt the market toward manufacturing, and it will hurt the economy rather than help it, because resources would be artificially diverted from other sectors of the economy to manufacturing,” Dubay said.
Kevin Hassett, director of economic policy studies at the conservative American Enterprise Institute, said Santorum’s plan would “create the biggest tax dodge in history,” as businesses raced to redefine themselves as manufacturers.
“How do you define manufacturing?” asked Andy Roth of the conservative Club for Growth. “Do movie studios manufacture films? Do book publishers, when they send a .pdf of a manuscript to China, are they manufacturing books? Companies are going to game this.”
For Santorum, whose social conservative bona fides are hardly ever questioned, the critiques should be a stinging rebuke. They come as frontrunning rival Mitt Romney has tried to paint Santorum as a big spender and a friend of labor unions from his days as a Pennsylvania senator.
The policy clearly resonates with Santorum personally, who often recalls how his grandfather “dug freedom” in western Pennsylvania coal mines.
“It wasn’t great wealth, it wasn’t opulent wealth,” Santorum said yesterday of the manufacturing jobs that have dwindled. “But it was wealth that was sustaining a family.”
Aides did not immediately comment on the criticism of Santorum’s tax policy, but in a recent interview with The Daily the candidate defended it as an appropriate response to changing dynamics in a globalized economy.
“When that old Main Street store becomes uncompetitive because of online sales, that’s just the dynamics of the market,” he said. “But it’s not like there’s a better way to make things in these other countries. It’s just the cost is higher here because of our tax and regulatory structure.”
Santorum is sure to continue spotlighting the policy ahead of critical primaries looming in Michigan and Ohio, both Rust Belt states that are a shell of the manufacturing juggernauts they once were.
But conservatives worry that when Santorum talks about the issue, he sounds a bit too much like President Obama, who has made revitalizing manufacturing a key plank of his economic platform.
“There’s a natural evolution of our economy toward high-intellectual-capital things like software — that’s not manufacturing, and that’s OK,” Hassett said. “To say that trend is something we should reverse through tax policy is just the height of economic illiteracy. It’s inexcusable.”
*** MORE ELECTION 2012 NEWS
STONE QUITS GOP IN TWEET OF PIQUE
Famed Nixon political adviser Roger Stone served online notice this week: He left the Republican Party.
Stone (pictured), a longtime political operative under numerous Republican presidents and candidates, changed his party registration in Florida from Republican to Libertarian. He bid the GOP farewell in a searing blog post.
“Sadly, Eisenhower, Nixon and Reagan wouldn’t recognize today’s Republican Party,” Stone wrote. “The GOP went from being a Main Street party under Ronald Reagan to being the Wall Street party again under both Bushes. ... Meanwhile social conservatives in the party demand litmus tests on issues like abortion and gay marriage equality from those who share their conservative economic and foreign policy views making a cohesive coalition of social and economic conservatives ultimately impossible.”
“Sadly the difference between the two major parties has become rhetorical,” he added. “Under the Democrats you’re going to hell. Under the Republicans, you are still going to hell but you are going more slowly.”
Stone, who registered as a Republican the day he turned 18, went on to be one of Richard Nixon’s most trusted advisers in Washington after he resigned in wake of the Watergate scandal. He worked campaigns for Reagan and on the 2000 Bush v. Gore recount in Florida. Stone said he voted for Ron Paul in last month’s Florida primary as his last act as a Republican.
SANTORUM CRUSHING ROMNEY IN OHIO: POLL
If Mitt Romney rallies to beat Rick Santorum in Michigan this month, he’s got another Midwestern headache waiting right around the corner in Ohio.
Santorum leads Romney by a whopping 18 points in Ohio’s March 6 primary, 42 percent to 24 percent, according to a Rasmussen poll yesterday.
The delegate-rich state is one of almost a dozen that votes on Super Tuesday.
MICHIGAN GOVERNOR ENDORSES ROMNEY
Michigan Gov. Rick Snyder is going with the state’s native son.
Republican Snyder yesterday endorsed Mitt Romney, whose father served as governor in the 1960s.
“He has deep ties to our state,” Snyder wrote in the Detroit News. “Mitt understands the challenges confronting Michigan as few Americans do.”
SQUEEZE YOUR KNEES AND JUST SAY ‘NO’
Foster Friess, a major financial backer of the super PAC supporting Rick Santorum, has a quaint birth control prescription.
Marveling at the Washington debate over contraception, Friess told MSNBC yesterday: “You know, back in my days, they used Bayer aspirin for contraception. The gals put it between their knees, and it wasn’t that costly.”
“Excuse me, I’m just trying to catch my breath from that, Mr. Friess, frankly,” surprised host Andrea Mitchell said.
DanH@thedaily.com
Santorum emphasizes that he would cut all corporate taxes, but as the grandson of an immigrant coal miner he holds America’s withering manufacturing sector in particularly high esteem and he sees a government role to revitalize the industry through tax incentives.
“We have to compete with manufacturers all over the world who want your job and in some cases took your job,” Santorum said yesterday at the Detroit Economic Club.
Likening it to the need for America to produce its own food and weapons, he added: “We need to have a manufacturing base in this economy. Why? Because of our national security.”
That has conservative policy analysts crying foul, while advocates for other sectors of the economy quietly gripe that they’d be effectively underwriting manufacturing under Santorum’s plan by paying a higher tax rate than otherwise needed.
“Giving a preferential rate is picking winners and losers through the tax code,” said Curtis Dubay, a tax policy analyst at the Heritage Foundation, a conservative think tank. “The goal of tax reform should be a neutral tax code.”
“This is not free-market economics, this is trying to tilt the market toward manufacturing, and it will hurt the economy rather than help it, because resources would be artificially diverted from other sectors of the economy to manufacturing,” Dubay said.
Kevin Hassett, director of economic policy studies at the conservative American Enterprise Institute, said Santorum’s plan would “create the biggest tax dodge in history,” as businesses raced to redefine themselves as manufacturers.
“How do you define manufacturing?” asked Andy Roth of the conservative Club for Growth. “Do movie studios manufacture films? Do book publishers, when they send a .pdf of a manuscript to China, are they manufacturing books? Companies are going to game this.”
For Santorum, whose social conservative bona fides are hardly ever questioned, the critiques should be a stinging rebuke. They come as frontrunning rival Mitt Romney has tried to paint Santorum as a big spender and a friend of labor unions from his days as a Pennsylvania senator.
The policy clearly resonates with Santorum personally, who often recalls how his grandfather “dug freedom” in western Pennsylvania coal mines.
“It wasn’t great wealth, it wasn’t opulent wealth,” Santorum said yesterday of the manufacturing jobs that have dwindled. “But it was wealth that was sustaining a family.”
Aides did not immediately comment on the criticism of Santorum’s tax policy, but in a recent interview with The Daily the candidate defended it as an appropriate response to changing dynamics in a globalized economy.
“When that old Main Street store becomes uncompetitive because of online sales, that’s just the dynamics of the market,” he said. “But it’s not like there’s a better way to make things in these other countries. It’s just the cost is higher here because of our tax and regulatory structure.”
Santorum is sure to continue spotlighting the policy ahead of critical primaries looming in Michigan and Ohio, both Rust Belt states that are a shell of the manufacturing juggernauts they once were.
But conservatives worry that when Santorum talks about the issue, he sounds a bit too much like President Obama, who has made revitalizing manufacturing a key plank of his economic platform.
“There’s a natural evolution of our economy toward high-intellectual-capital things like software — that’s not manufacturing, and that’s OK,” Hassett said. “To say that trend is something we should reverse through tax policy is just the height of economic illiteracy. It’s inexcusable.”
*** MORE ELECTION 2012 NEWS
STONE QUITS GOP IN TWEET OF PIQUE
Famed Nixon political adviser Roger Stone served online notice this week: He left the Republican Party.
Stone (pictured), a longtime political operative under numerous Republican presidents and candidates, changed his party registration in Florida from Republican to Libertarian. He bid the GOP farewell in a searing blog post.
“Sadly, Eisenhower, Nixon and Reagan wouldn’t recognize today’s Republican Party,” Stone wrote. “The GOP went from being a Main Street party under Ronald Reagan to being the Wall Street party again under both Bushes. ... Meanwhile social conservatives in the party demand litmus tests on issues like abortion and gay marriage equality from those who share their conservative economic and foreign policy views making a cohesive coalition of social and economic conservatives ultimately impossible.”
“Sadly the difference between the two major parties has become rhetorical,” he added. “Under the Democrats you’re going to hell. Under the Republicans, you are still going to hell but you are going more slowly.”
Stone, who registered as a Republican the day he turned 18, went on to be one of Richard Nixon’s most trusted advisers in Washington after he resigned in wake of the Watergate scandal. He worked campaigns for Reagan and on the 2000 Bush v. Gore recount in Florida. Stone said he voted for Ron Paul in last month’s Florida primary as his last act as a Republican.
SANTORUM CRUSHING ROMNEY IN OHIO: POLL
If Mitt Romney rallies to beat Rick Santorum in Michigan this month, he’s got another Midwestern headache waiting right around the corner in Ohio.
Santorum leads Romney by a whopping 18 points in Ohio’s March 6 primary, 42 percent to 24 percent, according to a Rasmussen poll yesterday.
The delegate-rich state is one of almost a dozen that votes on Super Tuesday.
MICHIGAN GOVERNOR ENDORSES ROMNEY
Michigan Gov. Rick Snyder is going with the state’s native son.
Republican Snyder yesterday endorsed Mitt Romney, whose father served as governor in the 1960s.
“He has deep ties to our state,” Snyder wrote in the Detroit News. “Mitt understands the challenges confronting Michigan as few Americans do.”
SQUEEZE YOUR KNEES AND JUST SAY ‘NO’
Foster Friess, a major financial backer of the super PAC supporting Rick Santorum, has a quaint birth control prescription.
Marveling at the Washington debate over contraception, Friess told MSNBC yesterday: “You know, back in my days, they used Bayer aspirin for contraception. The gals put it between their knees, and it wasn’t that costly.”
“Excuse me, I’m just trying to catch my breath from that, Mr. Friess, frankly,” surprised host Andrea Mitchell said.
DanH@thedaily.com
PHOTO: Gerald Herbert/AP
Mitt Romney prepares lunch while campaigning in Michigan.
ROGER STONE QUITS GOP IN TWEET OF PIQUE
