Rep. Michele Bachmann (R-MN) and former Gov. Jon Huntsman (R-UT)

Yesterday, 2012 GOP presidential long-shot Jon Huntsman unveiled an economic plan that, in addition to including standard conservative tropes about repealing the Affordable Care Act and the Dodd-Frank financial reform law, would eliminate the capital gains tax entirely. This proposal came just a week after Huntsman hinted that he may be open to raising the capital gains tax, which currently stands at 15 percent.

But Huntsman is far from alone in the GOP primary in proposing full elimination of the capital gains tax. In fact, five GOP presidential candidates have proposed the very same thing:

At least five Republican presidential candidates support eliminating taxes on capital gains, proposing even deeper cuts than former President George W. Bush endorsed and standing in contrast to advocates of higher investment tax rates such as Warren Buffett.

According to published reports or their websites, Minnesota Congresswoman Michele Bachmann, Texas Congressman Ron Paul, former pizza executive Herman Cain and former House Speaker Newt Gingrich have said they back getting rid of the capital gains tax, which now has a top rate of 15 percent for most assets held for more than a year.

Republicans have proven time and again that they really love tax cuts for the wealthy, but completely eliminating the capital gains tax is nothing but a pure handout to the ultra-rich. At the moment, the richest 0.1 percent of Americans pay 44 percent of the capital gains tax, and 68.3 percent of the tax is paid by the richest 1 percent. The bottom 95 percent of Americans pay just 10 percent of capitals gains taxes.

But the tax still brings in a substantial amount of revenue. Complete repeal, using data from the Congressional Budget Office, would cost about $1 trillion over 10 years. [See methodology below.]

As billionaire investor Warren Buffett wrote in an op-ed, “I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off.” Indeed, the conservative claim that lower capital gains rates leads to increased investment and job creations doesn’t hold up to scrutiny. Perhaps that’s why conservative icon Ronald Reagan actually equalized the capital gains rate with the regular income rate, a fact that conservatives tend to forget.

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The White House Office of Management and Budget released its latest budget projections today, which show that the current trajectory of the economy is still exceedingly weak. According to the alternative economic scenario, which includes the most updated economic assumptions, GDP growth will be just 1.7 percent this year and 2.6 percent next year. The alternative economic scenario also doesn’t project unemployment falling below 6 percent until 2017:

As the Huffington Post’s Sam Stein noted, the report does show that corporate America, unlike Main Street, is doing quite well:

In 2009, domestic corporate profits were $906 billion. By 2011, that number had risen to $1.322 trillion — an increase of roughly 46 percent. During that same time period, employee compensation went from $7.812 trillion to $8.264 trillion — an increase of just 5.7 percent.

According to researchers at Northeastern University, 88 percent of the real national income growth since 2009 have gone to corporate profits, while just one percent has gone to wages and salaries.

The OMB’s alternative scenario is slightly less optimistic than that coming from the Congressional Budget office. According to the CBO’s models, “as the growth of output picks up after 2013 in CBO’s forecast, the unemployment rate falls to 5.3 percent by the second half of 2016.” Still, CBO projects that unemployment will be 8.7 percent at the end of 2013.

Next week, President Obama is laying out a jobs plan, which will reportedly include an extension of the payroll tax cut enacted last year and a national infrastructure bank, but an intransigent House Republican majority has already said they will oppose some facets of the plan.

About a year ago, several of the nation’s biggest banks were caught in scandal over “robo-signing” — approving foreclosures without verifying basic information about the loan and fabricating documents to present to courts. For several months, a group of state attorneys general has been attempting to negotiate a settlement with the banks for their mortgage misdeeds.

However, those talks have broken down (as CAP warned they would), with the AG’s fracturing between those who want to craft a settlement quickly and those, like New York Attorney General Schneiderman, who want a deeper investigation into the banks’ activities. Meanwhile, as American Banker reported today, the banks have not stopped fabricating documentation in order to foreclose on borrowers:

Some of the largest mortgage servicers are still fabricating documents that should have been signed years ago and submitting them as evidence to foreclose on homeowners.

The practice continues nearly a year after the companies were caught cutting corners in the robo-signing scandal and about six months after the industry began negotiating a settlement with state attorneys general investigating loan-servicing abuses.

Several dozen documents reviewed by American Banker show that as recently as August some of the largest U.S. banks, including Bank of America Corp., Wells Fargo & Co., Ally Financial Inc., and OneWest Financial Inc., were essentially backdating paperwork necessary to support their right to foreclose.

In several instances, banks were signing over documents from lenders that no longer exist. For example, one Bank of America executive “signed a mortgage assignment on July 29 of this year that purported to transfer ownership of a mortgage from New Century Mortgage Corp. to a trustee, Deutsche Bank.” However, “New Century, a subprime lender, went bankrupt in 2007; and the Deutsche Bank trust that purported to hold the loan was created for a securitization completed in 2006 — about five years before Juarez signed it over to the trust.”

Goldman Sachs has reportedly agreed to “compensate some home loan borrowers for wrongful foreclosures,” as well as put an end to robo-signing. Given the way that the banks have handled the fallout from this scandal thus far, that is a promise that should definitely be taken with a grain of salt.

Sen. Pat Toomey (R-PA)

Over the last two days, two Republican governors — Govs. Chris Christie (NJ) and Bob McDonnell (VA) — have publicly rebuked House Majority Leader Eric Cantor’s (R-VA) call that aid to areas affected by Hurricane Irene be first offset by budget cuts. “Our people are suffering now, and they need support now. And they [Congress] can all go down there and get back to work and figure out budget cuts later,” Christie said. “My concern is that we help people in need,” McDonnell said. “I don’t think it’s the time to get into that [deficit] debate.”

However, there are still plenty of Republicans moving into Cantor’s corner. During a town hall meeting yesterday, Sen. Pat Toomey (R-PA) said that he agrees with Cantor that disaster aid needs to be offset by budget cuts:

Toomey, after a public town hall in Coudersport, was asked whether he agreed with comments made by House Majority Leader Eric Cantor about offsetting federal funding in the aftermath of Hurricane Irene.

“I do agree with that,” Toomey said. “It’s not as though we’re unprepared for this situation. We know that at any time in this great country of ours there are storms, there are floods…” Toomey said it is “reasonable” to have a federal response, but that it should either be budgeted up front or offset by other spending cuts.

Thousands of Pennsylvania residents are still without power from the storm, while 13 counties in the state have been approved for federal aid. The Pennsylvania Emergency Management Agency said that it’s “far too early to know” an exact damage figure.

Along with Toomey, Sen. Chuck Grassley (R-IA) agreed yesterday that disaster aid should be offset so that “it’s just not adding willy-nilly to the national debt.” Previously, Rep. David Schweikert (R-AZ) said that budget cuts must be a prerequisite for disaster aid in order to reassure “the business markets,” while Rep. Peter Roskam (R-IL) opined that the days when disaster relief could be funded without offsetting budget cuts “are gone.”

Last week, House Majority Leader Eric Cantor (R-VA) shockingly said that Congress should not approve emergency aid to states battered by Hurricane Irene unless it makes offsetting budget cuts elsewhere first. Cantor has been joined by several other congressional Republicans in demanding offsets be found for disaster relief.

Yesterday, the leading Republican in Cantor’s own state, Gov. Bob McDonnell, rebuked him and said disaster aid should not be held hostage for budget cuts. Now, Gov. Chris Christie (R-NJ) is joining this chorus of Republican dissent, saying that aid should be delivered first and that possible cuts should be decided on later. “Our people are suffering now, and they need support now,” said Christie:

New Jersey Gov. Chris Christie reacted angrily to a fight brewing in Washington over whether Hurricane Irene disaster aid may need to be offset by federal spending cuts. “Our people are suffering now, and they need support now. And they [Congress] can all go down there and get back to work and figure out budget cuts later,” the Republican governor told a crowd in the flood-ravaged North Jersey town of Lincoln Park.

New Jersey’s Office of Emergency Management and FEMA are currently surveying damage to the state from Hurricane Irene. Many school districts have delayed the beginning of the school year due to Irene, and they are expected to begin applications for federal aid shortly.