America's Tax Policy

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This is the third part of the debate. To read Part 1, click here, and 2, here.

Grover,

You're mad! It will never work!

Sorry, if you're going to play up to Bond Villain type I couldn't resist. But, come to think of it, there is a bit of the Bond villain insane scheme to your sinister plans. You're right that if you frame a question as tax cut versus tax hike, voters will usually favor the tax cut. At the same time, it's also true that voters in recent years--including Republican voters--do not favor tax cuts when the alternative is deficit reduction or specific federal programs.

So you can win elections by promising tax cuts and denying that there is any trade off with specific government spending. (Denouncing unspecified government spending also works.) But what you haven't figured out how to do is actually cut government spending. And, frankly, I don't think you can. Social Security, Medicare, defense spending, education--all these things are way too popular. If the public has to choose between those things and tax cuts, the tax cuts will go out the window. That's why the 1994 Republican Revolution fizzled.

What you can do, however, is reduce the proportion of the tax code borne by the rich and saddle the country with debt. Under President Bush, Republicans have also turned the federal government into an agent of largesse for the insurance industry, pharmaceutical companies, agribusiness, and other friendly business interests. (Yes, the old-style Democratic city machines invented this technique.) It's a good way to win elections. But you're no closer to the day when the government will fit into a Jacuzzi. The federal government spent 18.5 percent of GDP when Bush took office, and it spends 20.3 percent now.

Again, I concede that you've hit upon a good way to win elections. I further concede that you've hit upon a good way to make rich people richer. I don't, however, understand what the endgame is. Nor do I think social conservatives or small-government conservatives are wise to sign onto a political agenda which holds that maximal political capital must be spent on an agenda shared by only a tiny proportion of the party.

Maybe Reagan said he regretted his 1982 tax hike, but there was no alternative if he wanted to keep the government solvent. It was the only way to keep the massive deficits he created from growing to Latin American, economy-swallowing size.

Also, I notice you didn't rebut my even-more-telling detail, about how Reagan signed a progressive tax reform in 1986. If a Republican today tried to introduce legislation to make the tax code more progressive, clean out loopholes, and end favorable treatment for capital gains, you would press a button and he'd be dropped into a pool of piranhas, never to be heard from again.

My point, once again, is that modern Republicans have interpreted Reaganism as something quite different than what it actually was. A new generation of Republicans has arisen which remembers little about the 40th president's record and knows only that voting for tax hikes makes the baby Reagan cry.

Let me end with a question: Do you still have the pet boa constrictor? If so, what are the names of the mice you feed it?

Jonathan

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