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The End of Tax Cut Politics
Progressive Populist
by Nathan Newman
June 01, 2001

Forget the short-term storm and thunder over the exact size of Bush's tax cut plan. Below the glee of conservatives at stealing the presidency last fall, there is a real fear by some that tax cut politics has lost its ability to move the electorate and win elections. Heck, whatever the GOP folks say about the electoral college, they know that George Bush received less votes nationwide than Al Gore, and millions less than Gore and Nader's vote combined. Against one of the lousiest candidates possible, Bush couldn't sell his tax cuts to a majority of the voting public.

As conservative columnist Mark Steyn recently complained, "it's increasingly rare to find a majority in support of tax cuts -- it's just 48% in the most recent poll. In fact, what was once a surefire issue for conservatives has come, perversely, to favor the left."

The real fear of the right wing is that after passing any tax cut this year, it may be the last time they can even try to run a successful campaign on tax cuts, setting up the next election for a renewed round of vote-winning "class warfare" -- the conservative parlance for tax fairness -- by Democrats.

Taking Working Families Off the Tax Rolls

The problem for conservatives is that over the years, an increasing percentage of families have been taken off the income tax rolls. First, Clinton and the Dems pushed through the large Earned Income Tax Credit increase in 1993 that took a large portion of working poor families off the income tax rolls. Then, in order to sell their 1997 tax plan and pacify the "pro-family" Christian Coalition wing of the GOP, the Republicans pushed through the $500 per child tax credit in 1997, taking many more moderate income families off the income tax rolls. By this year, roughly one-third of families were paying no income tax -- although many still had heavy social security and Medicare tax burdens.

But since Republicans have little interest in cutting payroll taxes, Bush's plan had literally nothing to sell to over a third of families. Given that, it's hardly surprising that he had trouble finding a majority to be enthusiastic. And now, many conservatives fear that, in order to sell the new round of tax cuts for the wealthy, Bush and the GOP have had to offer more increases in child and other tax credits which will take an estimated 6 million more families off the tax rolls.

As Ramesh Ponnuru of the National Review bemoans, conservatives "take people off the tax rolls and fund social programs, heedless of the long-run political consequences of making government services seem free of charge." Or as Joseph Farah of WorldNetDaily.Com, a popular rightwing news site, recently wrote, "In essence, after implementation of the Bush plan, 50% of the public will be paying no taxes ... half the population will be getting, in essence, a free ride. They can then dictate to the other half."

Now, both conservative writers ignore the burden of payroll taxes and overestimate the effect of the Bush plan. But the truth of their observations is that as the main tax paid by working families is increasingly the payroll tax, they no longer will feel any kinship with the rants of the wealthy about the oppression of income taxes. The old Reagan trick of selling small income tax cuts to average families as a lure to sell big tax cuts for the rich just won't sell anymore.

Some Cuts for Wealthy May Never Happen

Worse for the conservatives, even if the Bush plan is largely enacted into law, there is no guarantee most of its provisions will ever be implemented. In order to keep the total ten-year projected costs down and create a greater appearance of fairness, the tax credits for families are implemented immediately while the largest tax cuts for the wealthy are phased in later in the decade. Some, like the Estate Tax repeal, are not implemented until as late as 2011.

One thing this means is that, according to the Center on Budget and Policy Priorities, the cost of the tax cuts will explode into a $5 trillion cost in the second decade from 2012-2021.

But the other thing this means is that progressives have up to a decade to organize for new laws canceling the implementation of later phase-ins of the giveaways to the wealthy, a campaign made easier by the budget-busting nature of implementing those cuts as later years approach.

In the best scenario, we could get the positive parts of the tax plan -- the child tax credits and deduction of charitable contributions by non-itemizers -- and block the later phase-ins of cuts for the wealthy. In the nightmare bogeyman-scenario of the Right, Greg Pierce of the Washington Times worries, "More than two-thirds of the tax cut arrives after 2004, by which time Hillary could be running the White House." (Hopefully, we can do better than that in the next election).

By playing the late phase-in game to make the tax cuts look more acceptable, the GOPers may have outsmarted themselves. By next year, progressives can just pocket the upfront tax breaks for moderate income families, then treat each subsequent year's tax phase-in for the rich as a new issue to politically club the rightwing during budget fights.

With tax cuts for the wealthy standing alone, shorn of accompanying breaks for average taxpayers, it will be a lot easier to mobilize to kill them, especially when the American people have shown over and over again that they prefer new investments in schools, health care and the environment.

It's the end of tax cut politics as we've known it. And I feel fine.

Nathan Newman of New Haven, Conn., a longtime union activist, is the National Vice President of the National Lawyers Guild. Email

Posted by Nathan at June 01, 2001 11:10 AM