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A Radical (?) Idea for Each Candidate--Skeel

Suppose that one of the candidates needs to shake things up a bit in the coming weeks, to take a surprising position that could unsettle his base a little but offers promise with other constituencies. What might the candidates propose, consistent with their own values? Here’s one possibility for each.

For Obama, my pick would be school vouchers. Obama is heavily dependent on the teachers unions, as are the Democrats generally, so it’s very hard to imagine him supporting vouchers. But suppose he endorsed a voucher proposal that combined vouchers with increased funding for public schools, perhaps a dollar per student in increased funding for every dollar per student in vouchers. The teachers unions wouldn’t be happy of course, but the increased funding for public education would soften the blow; and a proposal like this might be attractive to Catholic and evangelical voters, and more generally to the lower middle class voters that Obama had trouble attracting in the primaries.

For McCain, how about runaway executive compensation? Executive compensation was one of the causes of the Enron and WorldCom scandals (huge amounts of stock options gave executives an incentive to do anything necessary to increase the company’s stock price), and executive pay was the one issue that none of the subsequent reforms ever really addressed. Proposing to regulate executive pay wouldn’t sit well with the conservative base McCain is trying so hard to win over. But suppose he proposed to tweak the tax rules to prohibit a company from deducting as a business expense any amount over, say, $5 million a year paid to any executive. The conservative base wouldn’t like this much, but it’s much less intrusive than directly prohibiting high pay; and an effort to curb executive compensation might resonate with middle class Americans who are disturbed by the recent excesses, and whose votes McCain dearly needs.

It may be that neither candidate would be willing to unsettle his base (and in Obama’s case, to reverse his explicit anti-voucher stance). But if either is looking for a way to shake things up, these issues might be a place to start.


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Comments ( 1 )

I like the idea of doing something unconventional, but I'm not sure I can get on the executive comp bandwagon. Though I'm familiar with only the broadest contours of Bebchuk's work and the debates on this issue (and haven't read 'Icarus'), I tend toward the Bainbridge side (I'll also admit that some of these people are my clients) of these issues.

What about changing the tax treatment of 2 and 20 for fund managers? Or closing some dated corporate tax deductions? And though this works against some of my clients, changing the rhetoric around estate taxes and not seeking their repeal.