Browsing the blog archivesfor the day Saturday, December 1st, 2007.


Republicans and the “T” Word

conservatism, Republican Party

Michael Kinsley says that Fred Thompson may not have what it takes to be the Republican nominee:

The real strategy of Thompson’s plan is a familiar one from past Republican tax plans: Give large breaks to businesses and the wealthy (by, say, abolishing the estate tax), bribe the middle class to go along by offering smaller breaks to them, and don’t worry about paying for it all.

But maintaining your indifference to the size of the bill you are running up requires nerves of steel. You must never waver, never, never express the slightest concern that lost revenue may be a problem, and never, never, never even hint at where you might go to find the money. Thompson followed the script, putting out word that the explosion of economic activity after his tax reform would bring in too much money to even count, yadda, yadda, yadda. Then, unfortunately, he blinked. He revealed that he is a political amateur by making ominous noises about finding some savings through changes in Social Security benefits, which has to mean cuts in Social Security benefits or no money will be saved.

Raise your hand if you would be happy to accept lower Social Security payments in exchange for a simpler tax code.

I thought so.

Kinsley also discusses Mike Huckabee’s “fair tax” proposal:

He has endorsed something called the “fair tax,” which involves repealing all federal revenue sources—the income tax, Social Security tax, estate tax, everything—and replacing them with a 23 percent sales tax on everything except education. The fair tax propaganda says, frankly, that it is intended to be “revenue-neutral.” That is, it would bring in just as much money as the taxes it replaces. No monkey business about explosions of new revenue.

This makes it easy to figure out who would win and who would lose in Huckabee’s so-called “fair” tax. It’s a zero-sum game: Every dollar someone’s taxes go down is a dollar someone else’s go up. What you spend every year is the amount you earn minus the amount you save. On average, Americans save practically nothing, but wealthier people save more. Very poor people actually spend more than they earn, while Bill Gates and Warren Buffett couldn’t spend more than a small fraction of their income if they tried. So, wealthy people are going to see their taxes go down, which means that poor and middle-class people are going to see their taxes go up.

In spite of his soak-the-poor tax plan, the right-wing Club for Growth has gone to the mattresses to defeat Huckabee. Leslie Wayne writes in tomorrow’s New York Times:

As Mike Huckabee rises in the Republican presidential polls, fiscal conservatives have been raising alarms about a series of tax increases he oversaw while governor of Arkansas — new taxes on gasoline, nursing home beds and even pet groomers.

The Club for Growth, a politically influential antitax group, has dubbed Mr. Huckabee Tax Hike Mike and poured money into anti-Huckabee advertisements that were broadcast in early nominating states, with more on the way. Mr. Huckabee “spends money like a drunken sailor,” according to the group’s news releases, and it has sprinkled YouTube and the airways with videos that mock him and his policies.

Frankly, your average drunken sailor is a miser compared to most Republicans.

But the record offers a more complex and nuanced picture. While taxes did rise in the 10 years that Mr. Huckabee was governor, the portrayal of him as a wild-eyed spendthrift is hardly apt. For the most part, Mr. Huckabee’s tax initiatives had wide bipartisan support, with the small number of Republicans in the overwhelmingly Democratic state legislature voting for the tax increases and many maintaining that the state was better for them.

David Lightman writes for McClatchy Newspapers:

In the late 1990s, as the nation’s and Arkansas’ economies boomed, that wasn’t difficult, and Huckabee presided over substantial tax cuts. In 1997 and 1998, state lawmakers approved $97.9 million in income-tax relief, and another $14.1 million in smaller tax breaks.

About 65 of Huckabee’s 90 tax reductions were enacted from 1997 to 1999. The centerpiece was $90.6 million annually in individual income-tax breaks, but most of the cuts were small and highly specialized.

Among them: exempting residential lawn care from the gross receipts tax, a Salvation Army sales-and-use-tax exemption and an exemption for sales of biomass to produce electricity.

Huckabee came to Washington in 1999 and boasted about his record. “The big battle was no longer, ‘Which taxes will we raise and by how much?’ but ‘Which taxes will we cut and by how much?’ ” he told the Heritage Foundation, a conservative research center.

Bill Clinton’s economy made being a tax cutter easy and fun.

But as the economy soured early this decade, Huckabee found himself in the same situation as many other chief executives: Massive spending cuts weren’t enough to balance the budget, so he had to find new revenue.

But as the economy soured early this decade, Huckabee found himself in the same situation as many other chief executives: Massive spending cuts weren’t enough to balance the budget, so he had to find new revenue.

The State Supreme Court handed him another problem when it ruled that Arkansas’ education-funding system wasn’t meeting student’s needs and had to be revamped.

So in 2003, Huckabee had a very different message. In his State of the State speech that year, he warned lawmakers that, “If you deem that all new revenue sources, your proposals or mine, are indeed dead on arrival, then you’ll be saying that teacher pay increases are dead, scholarships are dead, medicine for the elderly is dead, that long sentences are dead and that we’ll have a massive early release of thousands of inmates from the (prison) system.”

Unlike the bleepheads of the Club for Growth, Gov. Huckabee actually had to govern a state. But in GOP Land, facing reality is heresy, and as a candidate Huckabee has to prove he can still be oblivious. Back to Kinsley:

Neither Thompson nor Huckabee has anything useful to say about the real problem, which is the huge gap between revenues and spending that George W. Bush, having inherited a surplus, is leaving behind. Thompson’s willingness to take on Social Security would earn him some points for courage if he were planning to use the money to reduce the deficit or address the entitlements problem. But he wants to pour the money into new tax cuts for business, which is not just a bad idea but an incredibly lazy one. There’s more to running for president than buying a round of drinks at the country club and asking what’s on people’s minds.

At least Huckabee’s revenue neutrality would not make the problem worse. For this, the business wing of the Republican Party is hysterically labeling him a “fiscal liberal.”

A what? For Republicans, the epithet liberal used to mean someone who wanted the government to spend a lot of money that it didn’t have. Then it meant someone who wanted the government to spend what it had, but no more. Now, apparently, you are a “liberal” if you only want the government to spend a few hundred billion dollars a year more than it has.

Actually, the spending debate is now over, or should be. The GOP bluff has been called. Republicans had six years in which they controlled the White House and (for most of that time) both houses of Congress. They could have cut any spending they wanted. They did the opposite. None of the realistic Republican presidential possibilities is discussing spending cuts except in the vaguest terms.

But if you peer into the abyss of debt and say that what this country needs is another tax cut, that makes you a good conservative.

What really makes you a good conservative is to believe you can have something for nothing. All their elaborate theories about supply-side economics and “fair” taxes are fiscal alchemy. If we can just find the right formula, they think, government revenue will appear magically, and fairies will provide the government services we want without our having to pay for them.

Share Button
15 Comments