Are Romney and Ryan Forgetting About Tax Cuts as a Winning Issue?
Republican National Convention — Tampa, Florida
As the late Robert Novak once put it, “God put the Republican Party on earth to cut taxes. If they don’t do that, they have no useful function.”
And since 1980, the tax issue has been a key driver — perhaps the key driver — of electoral success for the GOP. But during his speech last night, Paul Ryan mentioned the word “tax,” one way or the other, seven times.
– “What did the taxpayers get out of the Obama stimulus? More debt. That money wasn’t just spent and wasted – it was borrowed, spent, and wasted.”
– Obamacare comes to more than two thousand pages of rules, mandates, taxes, fees, and fines that have no place in a free country.
– You see, even with all the hidden taxes to pay for the health care takeover, even with new taxes on nearly a million small businesses, the planners in Washington still didn’t have enough money.
– With tax fairness and regulatory reform, we’ll put government back on the side of the men and women who create jobs, and the men and women who need jobs.
– I learned a good deal about economics, and about America, from the author of the Reagan tax reforms – the great Jack Kemp. What gave Jack that incredible enthusiasm was his belief in the possibilities of free people, in the power of free enterprise and strong communities to overcome poverty and despair. We need that same optimism right now.
– He was the Republican governor of a state where almost nine in ten legislators are Democrats, and yet he balanced the budget without raising taxes. Unemployment went down, household incomes went up, and Massachusetts, under Mitt Romney, saw its credit rating upgraded.
But no where did supply-sider Ryan talk about cutting taxes, even though his new boss, Mitt Romney, says he wants to cut everyone’s tax rates by 20 percent. Ryan didn’t even use the phrase “tax cuts” when talking about Reagan. Instead, the speech went with the wonkier, softer “tax reform.”
On Twitter today, CNBC's Larry Kudlow expressed his dismay: "@RepPaulRyan talked "tax fairness." This is not pro-growth reform. And no mention of tax cuts. Very disappointing."
Now here is Ryan in his Path to Prosperity budget:
A world-‐class tax system should be simple, fair and pro-‐growth. The U.S. tax code fails on all three counts. The tax code is notoriously complex: Individuals, families and employers spend over six billion hours and over $160 billion a year trying to negotiate a labyrinth of deductions. The tax code is patently unfair: Many of the deductions and preferences in the system – which serve to narrow the tax base – were lobbied for and are mainly used by a relatively small group of mostly higher-‐income individuals. And the tax code creates a drag on growth, because it is highly inefficient, uncompetitive and unpredictable
In fact, Ryan spends nine pages attacking the current tax code and Obama’s tax hikes while making the persuasive case for pro-growth tax reform, including cutting the top marginal rate to 25%. And fairness is defined in terms of crony capitalism rather than liberal notions of equity. Why wasn’t some of that stuff in his speech? Good question.
And who knows, maybe Romney himself will really hammer the tax issue tonight.
In his 1980 nomination acceptance speech, Reagan mentioned taxes some 20 times and aggressively pushed for tax cuts:
I will not accept the excuse that the federal government has grown so big and powerful that it is beyond the control of any president, any administration or Congress. We are going to put an end to the notion that the American taxpayer exists to fund the federal government. The federal government exists to serve the American people. On January 20th, we are going to re-establish that truth.
Also on that date we are going to initiate action to get substantial relief for our taxpaying citizens and action to put people back to work. None of this will be based on any new form of monetary tinkering or fiscal sleight-of-hand. We will simply apply to government the common sense we all use in our daily lives.
Work and family are at the center of our lives; the foundation of our dignity as a free people. When we deprive people of what they have earned, or take away their jobs, we destroy their dignity and undermine their families. We cannot support our families unless there are jobs; and we cannot have jobs unless people have both money to invest and the faith to invest it.
There are concepts that stem from an economic system that for more than 200 years has helped us master a continent, create a previously undreamed of prosperity for our people and has fed millions of others around the globe. That system will continue to serve us in the future if our government will stop ignoring the basic values on which it was built and stop betraying the trust and good will of the American workers who keep it going.
The American people are carrying the heaviest peacetime tax burden in our nation’s history — and it will grow even heavier, under present law, next January. We are taxing ourselves into economic exhaustion and stagnation, crushing our ability and incentive to save, invest and produce.
This must stop. We must halt this fiscal self-destruction and restore sanity to our economic system.
I have long advocated a 30 percent reduction in income tax rates over a period of three years. This phased tax reduction would begin with a 10 percent “down payment” tax cut in 1981, which the Republicans and Congress and I have already proposed.
A phased reduction of tax rates would go a long way toward easing the heavy burden on the American people.
Now that is how you sell “tax reform.”
Of course, that was then, this is now. The tax code is vastly more pro-growth in 2012, even with all its imperfections, than it was in 1980. Regulatory reform, immigration reform, and cutting spending are also important pro-growth issues.
But tax reform — including tax rate cuts — is just as imperative. A reformed tax code that is pro-investment — including lower rates, fewer distorting deductions — would boost economic growth, create jobs, raise incomes, and make it easier to pay down our debt.
Fundamental tax reform should be fundamental to reform conservatism and to any political campaign selling pro-growth economics.