“My father’s decision to raise taxes was wrong. One of my first actions as President will be to cut marginal tax rates!”
-Gov. George W. Bush
Last month I met with the front-runner of the Republican Presidential nomination, George W. Bush, at the governor’s mansion in Austin, Texas. I spoke with him at length about his tax policies, and how they might affect investors. He told me that his first priority is to cut marginal tax rates on federal income taxes.
I asked him point blank what he thought of his dad’s decision, after making his famous “Read my lips, no new taxes” pledge, and then raising taxes in 1991. Many political commentators think this reversal cost Bush the election. “It was wrong,” his son said without hesitation. A few minutes later he came back to me and reemphasized the point; “It was the biggest mistake of his political career.”
In essence, Gov. Bush was saying that if he becomes President, he will atone for his father’s sin by reversing his tax policy.
CAPITAL GAINS TAXES, SOCIAL SECURITY
I then asked him about other taxes. He does not favor a further reduction of captal gains taxes. He thinks the 20% rate on long-term gains is already low enough (although he will undoubtedly sign a bill lowering the rate to 15%, which is what Republicans have already passed). His main focus will be to cut the high marginal rates on income taxes. He also told me he strongly favors “improving” Social Security by privatizing it, at least partially. He talked about placing at least two percentage points of each eligible worker’s salary into “personal savings accounts.”
I was delighted how candid he was about Social Security privatization. As you may recall, it took former House Speaker Newt Gingrich three years to admit publicly his support for privatization. The idea, long championed by free-market economists, is now becoming mainstream.
At the governor’s meeting was also Howard Phillips, the conservative gadfly running for president on the U. S. Constitution Party. (The group is even smaller than the Libertarian Party.) Howard walked up to Gov. Bush and brashly asked, “Will you let me in on the debates?” The governor didn’t hesitate: “No ! ” Will Gov. Bush get my vote? Currently I support Steve Forbes, who is more libertarian than Bush. But I think Bush would be far superior to Democrats Bradley or Gore, and is more libertarian than his father.