Commentary Magazine


Topic: taxes

Conservatism and the Search for Apostates

During a recent interview on NBC’s The Today Show, former Florida Governor Jeb Bush was asked whether the Republican Party should put revenue increases on the table in order to reach a grand bargain.

Governor Bush said it’s hard to imagine that, after the tax increases that went into effect earlier this year, one could argue we have a revenue problem. When pressed by Matt Lauer, however, whether there was any “wiggle room,” Bush said, “There may be [room for revenue] if the president is sincere about dealing with our structural problems.” And he went on to speak about the importance of growth as a way to increase revenues.

It didn’t take long for Bush’s critics to strike. As a story  in the Washington Post put it:

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During a recent interview on NBC’s The Today Show, former Florida Governor Jeb Bush was asked whether the Republican Party should put revenue increases on the table in order to reach a grand bargain.

Governor Bush said it’s hard to imagine that, after the tax increases that went into effect earlier this year, one could argue we have a revenue problem. When pressed by Matt Lauer, however, whether there was any “wiggle room,” Bush said, “There may be [room for revenue] if the president is sincere about dealing with our structural problems.” And he went on to speak about the importance of growth as a way to increase revenues.

It didn’t take long for Bush’s critics to strike. As a story  in the Washington Post put it:

[Bush] drew a sharp critique from anti-tax activist Grover Norquist… Norquist likened Bush’s comments to “throwing marbles at the feet” of GOP lawmakers. “If you’re trying to introduce yourself to the modern Republican Party outside of Florida, probably best not to start with a discussion about how much you could be talked into a tax increase,” Norquist said. “People are looking for someone who’s tough, and you’re saying, ‘I’d fold.’”        

Craig Shirley, in the context of a broader attack on Bush writes, “A Bush speaking at the Reagan dinner [the annual Conservative Political Action Conference dinner] is for True Believers mind-boggling.” Shirley goes on to say, “Jeb Bush might also explain his call this week for even higher taxes on the American worker.”

Now both Norquist and Shirley have, in different ways, made useful contributions to the conservative cause–Norquist on policy and Shirley through his fine book on the 1980 Reagan campaign. I’ve had cordial communications with both; but in this instance their criticisms strike me as misguided.

For one thing, Jeb Bush was a highly successful conservative governor. To therefore characterize an invitation to Bush to speak at CPAC’s annual dinner as “mind-boggling” is itself a bit mind-boggling. (It’s worth noting that Bush spoke last week at the Reagan Library where he was warmly welcomed.)

In addition, Bush was not calling for higher taxes on American workers; he was saying that if Barack Obama was serious about dealing with our structural problems–meaning our unsustainable entitlement system–there may be room for an increase in revenues, which could be done by closing loopholes and deductions instead of increasing tax rates. Bush wasn’t saying he expected the president to tackle entitlements in a serious manner; he was merely answering a hypothetical in a reasonable way.

But the main point I want to underscore is the danger to conservatism when someone like Jeb Bush (or Mitch Daniels, or Bob McDonnell, or Chris Christie) is considered an apostate.

Let’s consider Bush’s record as governor. While Bush never signed an anti-tax pledge, he never raised taxes. In fact, he cut taxes every year he was governor (covering eight years and totaling $20 billion). 

Ronald Reagan, by contrast, signed into law what his biographer Lou Cannon called “the largest tax hike ever proposed by any governor in the history of the United States”–one four times as large as the previous record set by Governor Pat Brown–as well as the nation’s first no-fault divorce law and legislation liberalizing California’s abortion laws, which even people sympathetic to Reagan concede “led to an explosion of abortions in the nation’s largest state.” (Reagan didn’t anticipate the consequences of the law and deeply regretted his action.)

Now imagine the Norquist and Shirley standard being applied to Reagan in the 1970s. If Jeb Bush’s comments unleashed heated attacks, even given his sterling anti-tax record, think about what Reagan’s support for unprecedented tax increases–including higher taxes on top rates, sales taxes, bank and corporate taxes, and the inheritance tax–would have elicited. The Gipper would have been accused of being a RINO, a pseudo-conservative, unprincipled, and a member of the loathsome Establishment. Fortunately for Reagan (and for America) the temptation to turn conservatism into a rigid ideology was not as strong then than it is now.

To be clear: I consider Reagan to be among the greatest presidents of the 20th century and a monumental figure in the conservative movement. He shaped my political philosophy more than any other politician in my lifetime, and working in his administration was a great privilege. I’m just glad he was judged in the totality of his (conservative) acts, which were enormously impressive, and not marked out as unprincipled or a heretic because of his transgressions against conservative orthodoxy. 

What is sometimes forgotten about Reagan, I think, is that he was not only a man well grounded in political theory; he was also a supremely great politician who made thousands of decisions and compromised throughout his career, usually wisely but sometimes not. And on those rare occasions when he was criticized by movement conservatives, he was known to complain about those who wanted to go “off the cliff with all flags flying.”

It tells you something about the times in which we live that some of those who consider themselves to be the torchbearers of Reaganism are now employing a standard of purity that Reagan himself could not have met and would never have insisted on.

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Mr. Obama’s Planet

Saul Bellow used to joke that while the unexamined life is not worth living, the examined life will make you wish you were dead. The political equivalent might be that we can’t live with taxation without representation, but taxation with representation is going to kill us. 

By “us,” I mean those of us who like to find out what’s in a bill before Congress passes it; who would like our representatives to read bills before they vote on them; who want to see hearings on legislation before it is brought to a vote; and who would like to have it posted on a website for a few days before it is signed into law–just in case we have some questions after we find out what’s in it. For such people, Senator Rand Paul’s description of the Senate’s action in passing a $600 billion tax increase this week will be discouraging: 

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Saul Bellow used to joke that while the unexamined life is not worth living, the examined life will make you wish you were dead. The political equivalent might be that we can’t live with taxation without representation, but taxation with representation is going to kill us. 

By “us,” I mean those of us who like to find out what’s in a bill before Congress passes it; who would like our representatives to read bills before they vote on them; who want to see hearings on legislation before it is brought to a vote; and who would like to have it posted on a website for a few days before it is signed into law–just in case we have some questions after we find out what’s in it. For such people, Senator Rand Paul’s description of the Senate’s action in passing a $600 billion tax increase this week will be discouraging: 

I think it was 2:00 in the morning, and everybody kind of wanted to go home. And so I think nobody had a chance really to read the bill. I’m not sure the bill really was even around for anybody to read at 2:00 in the morning. It certainly defied all of the rules that we have in the Senate. We have one specific rule that says bills have to be online for 48 hours. So when things get thrown together hurriedly in the night, people have no idea what’s in these bills. 

At least the tax increase was called a tax increase. In 2010, President Obama pushed through Congress (at the last moment, with no hearings) a new 3.8 percent tax on investment income, calling it a “Medicare contribution.” But it was not a “contribution” and it had nothing to do with Medicare: it had no effect on the Medicare benefits of the person making the “contribution;” it had no effect on the Medicare benefits of anyone else; the revenue from the “contribution” did not go to the Medicare Trust Fund, but rather straight to the Treasury’s general fund, to be spent on things other than Medicare. 

The individual mandate under Obamacare will be enforced by what the legislation called a “shared responsibility payment.” None dared call it a “tax” while it was being considered, but when it got to the Supreme Court, the Obama administration argued a tax is what it was. Chief Justice John Roberts upheld it as a new kind of tax–a tax for not doing something. It used to be that taxes were levied on income earned or things done. Now we have “shared responsibility payments” for not doing what Congress wants us to do (although the chief justice agreed Congress had no power to require us to do it). Undoubtedly there will be more “failure-to-do-it” taxes in the future, now that they have been constitutionally blessed.

It would take an extraordinary novelist to come up with concepts like these–“shared responsibility payments” that are not “taxes” when they are considered but become new kinds of “taxes” after they’re passed; new “Medicare contributions” that don’t go to Medicare or its “trust fund;” $600 billion tax increases considered by the world’s greatest deliberative body at two in the morning, without the benefit of hearings or public comment or even a text. The resulting novel wouldn’t sell as fiction–no one would willingly suspend disbelief. But as non-fiction it might do quite well.

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The Boehner-Cantor Rift and the Speaker Election

House Majority Leader Eric Cantor broke with Speaker John Boehner on the fiscal cliff deal vote yesterday, fueling speculation that he may challenge Boehner in Thursday’s Speaker election. At the Guardian, Jim Antle writes

It’s rare for the top two members of the House leadership to split on an important vote. Bob Michel, the hapless leader of the House Republicans during a long period in the minority, and Newt Gingrich voted differently on the 1990 “read my lips” tax increase. They split again over the 1994 assault weapons ban.

Even less common is a House speaker and majority leader going their separate ways on big-ticket legislation. The last major example is when the Democratic-controlled House debate funding President George W Bush’s surge in Iraq. House speaker Nancy Pelosi allowed the measure to proceed to the floor and voted no. House majority leader Steny Hoyer voted yes.

House speakers typically don’t even vote at all unless it is necessary to break a tie. So it may have been a clarifying moment when speaker of the House John Boehner and House majority leader Eric Cantor parted ways on the deal that ended the long national nightmare known as the fiscal cliff. Boehner voted for the bipartisan agreement negotiated between Vice-President Joe Biden and Senate Minority Leader Mitch McConnell; Cantor breathed the final moments of life into the opposition.

As Antle notes, despite conservative frustration with Boehner, Cantor is the only one who could potentially rally enough members behind him to seize the gavel. And Breitbart reports that there may be growing support for it:

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House Majority Leader Eric Cantor broke with Speaker John Boehner on the fiscal cliff deal vote yesterday, fueling speculation that he may challenge Boehner in Thursday’s Speaker election. At the Guardian, Jim Antle writes

It’s rare for the top two members of the House leadership to split on an important vote. Bob Michel, the hapless leader of the House Republicans during a long period in the minority, and Newt Gingrich voted differently on the 1990 “read my lips” tax increase. They split again over the 1994 assault weapons ban.

Even less common is a House speaker and majority leader going their separate ways on big-ticket legislation. The last major example is when the Democratic-controlled House debate funding President George W Bush’s surge in Iraq. House speaker Nancy Pelosi allowed the measure to proceed to the floor and voted no. House majority leader Steny Hoyer voted yes.

House speakers typically don’t even vote at all unless it is necessary to break a tie. So it may have been a clarifying moment when speaker of the House John Boehner and House majority leader Eric Cantor parted ways on the deal that ended the long national nightmare known as the fiscal cliff. Boehner voted for the bipartisan agreement negotiated between Vice-President Joe Biden and Senate Minority Leader Mitch McConnell; Cantor breathed the final moments of life into the opposition.

As Antle notes, despite conservative frustration with Boehner, Cantor is the only one who could potentially rally enough members behind him to seize the gavel. And Breitbart reports that there may be growing support for it:

“At least 20 House Republican members have gotten together, discussed this and want to unseat Speaker Boehner–and are willing to do what it takes to do it,” [American Action Majority spokesperson Ron] Meyer said. “That’s more than enough to get the job done, but the one problem these guys face is they need a leader to coalesce behind.” 

Meyer said the conservatives have considered House Majority Leader Eric Cantor (R-VA) to take the helm after Boehner is knocked out. His opposition from the right to the Senate fiscal cliff deal that Vice President Joe Biden cut with Senate Minority Leader Mitch McConnell is a sign Cantor may try for the job. 

AMA is hardly the only conservative entity aware of the rekindled effort afoot to unseat Boehner. Another conservative with inside knowledge of the effort told Breitbart News that the movement has “new focus and juice,” and if enough members go to Boehner telling him they won’t support his re-election, that Americans should “watch for him to resign gracefully.”

AMA has been one of Boehner’s most vocal critics, so it’s not clear how much of this is just wishful thinking and how much reflects an actual burgeoning revolt. For one, Cantor’s office has downplayed his rift with Boehner, saying he stands behind the current speaker. And many members might be concerned about shaking up House GOP leadership right before the debt ceiling debate. 

Then there’s the question of how much of this the Boehner opposition brought on itself. After all, the speaker’s Plan B deal that was killed by his internal critics was better in comparison to what ended up going through yesterday. Conservatives have legitimate complaints about the final deal, and legitimate grievances about the closed-door process of negotiations. But Boehner had to play the hand he was dealt, and unfortunately for Republicans it’s been stacked against them since the November election.

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A Bad Deal Beats a Calamitous Outcome

The deal to avoid going over the so-called fiscal cliff was a lousy one: tax rate increases during a weak economy, no spending reductions, nothing on entitlement reform. And yet if House Republicans had succeeded in derailing this deal, negotiated between Senator Mitch McConnell and Vice President Joe Biden, it would have been disastrous. 

It would have led to much higher tax increases on all Americans, even beyond the increase in payroll taxes that will now go into effect, and triggered decimating cuts in the defense department. And it would have done a great deal to advance the storyline that Republicans — at least House Republicans — are extremists enamored with nihilism.

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The deal to avoid going over the so-called fiscal cliff was a lousy one: tax rate increases during a weak economy, no spending reductions, nothing on entitlement reform. And yet if House Republicans had succeeded in derailing this deal, negotiated between Senator Mitch McConnell and Vice President Joe Biden, it would have been disastrous. 

It would have led to much higher tax increases on all Americans, even beyond the increase in payroll taxes that will now go into effect, and triggered decimating cuts in the defense department. And it would have done a great deal to advance the storyline that Republicans — at least House Republicans — are extremists enamored with nihilism.

I don’t believe that narrative for a moment. Most Republicans want to take meaningful steps to re-limit government, which is entirely admirable. But they faced a particularly bad set of circumstances, and it wasn’t at all clear to me what the game plan would have been if they had succeeded in blowing up the deal passed by an overwhelming margin in the Senate. 

To have amended the Senate deal with the most minor spending cuts–essentially pocket change, given the level of deficits and debt we’re dealing with–would have been fiscally meaningless. And if an amended deal had led to no deal at all–which is precisely what would have happened–it would have been calamitous for House Republicans. There is simply no way Republicans could extract a good, or even mediocre, deal from this situation. They had to hope they could minimize the damage, retreat to safer and better ground, and think through a strategy on how to more effectively wage future battles with the president. Republicans can also take some comfort in the fact that Democrats, after having spent a decade demagoguing the Bush tax cuts, made them permanent for 98 percent of Americans. And as the dust settles on this deal, it may dawn on Republicans that Democrats, who presumably were in a position of maximum strength, didn’t get nearly as much as they hoped for. (For more, see Yuval Levin’s excellent analysis here.)   

Congressional Republicans who wanted to amend the deal sent to them by the Senate may have been engaging in a primal scream of sorts. They are enormously (and understandably) frustrated at the president’s staggering indifference to our debt crisis and their inability to do anything about it. And because this deal is so bad in so many ways, they wanted to vote against it. But if more of them had voted the way Senator Marco Rubio and Representative Eric Cantor did, they would have badly damaged their party and their country.

I for one am glad that cooler and wiser head prevailed and that this bad deal didn’t give way to a much worse outcome. Sometimes that’s the best you can hope for in the aftermath of a damaging election loss.

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Obama Sets Stage for Conflict

Just as it looked like a fiscal cliff deal was coming together, President Obama gave a partisan, sarcastic speech this afternoon that seemed intended to set back the entire process. As Jonathan wrote, Republicans have good reason to think the president’s goal is to go over the cliff. But they also suspect the White House is preparing to push for further tax increases, in addition to the hikes on individuals making over $400,000 (and families making over $450,000) a year.

“What they’re telegraphing to me is that when Republicans ask for spending cuts, [Democrats are] gonna say ‘You’re not getting those unless we get more tax hikes’,” said one Republican Senate aide after the speech.

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Just as it looked like a fiscal cliff deal was coming together, President Obama gave a partisan, sarcastic speech this afternoon that seemed intended to set back the entire process. As Jonathan wrote, Republicans have good reason to think the president’s goal is to go over the cliff. But they also suspect the White House is preparing to push for further tax increases, in addition to the hikes on individuals making over $400,000 (and families making over $450,000) a year.

“What they’re telegraphing to me is that when Republicans ask for spending cuts, [Democrats are] gonna say ‘You’re not getting those unless we get more tax hikes’,” said one Republican Senate aide after the speech.

According to Senate GOP sources, there is no more debate on the deal to raise taxes on those making over $400,000, which is necessary to avert automatic across-the-board expiration of the Bush tax cuts. But Republican leadership is balking at the White House demand to delay sequestration without corresponding, targeted spending cuts.

“Not only was [Obama’s speech] unhelpful and antagonistic (as pretty much every journalist on Twitter and even Ezra Klein recognized), the tax part of negotiations is done,” another Republican aide said in an email. “There’s already an agreement there. The sticking point is Democrats trying to turn off the sequester cuts. Republicans aren’t going to agree to simply set spending cuts aside.” 

One big concern is that the White House will demand additional tax increases down the road, in return for spending cuts. Some also say the current tax deal will impact more Americans than initially thought. According to a Senate Republican source, the tax increase on individuals/families making over $400,000/$450,000 a year is not enough to reach the $600 billion in tax revenue included in the potential deal, even if you include hikes on capital gains, dividends, and phased-out personal exemptions and itemized deductions. In other words, those making well under $400,000–and as low as $250,000 a year–could also end up paying higher taxes under the deal.

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Happy New Year, America

If you’d like to have your New Year’s Eve thoroughly ruined, I’d suggest taking a look today at Mortimer Zuckerman’s piece over at USNews.com, “Brace for an Avalanche of Unfunded Debt.”

It’s so depressing because it’s true. The federal government keeps its books not in ways that most clearly reveal the true financial picture, but in ways designed, quite deliberately, to obscure that picture. This is for the short-term benefit of politicians and nothing else, the country be damned. And, as Zuckerman notes, unless something is done about this, and soon, that is exactly what the country will be.

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If you’d like to have your New Year’s Eve thoroughly ruined, I’d suggest taking a look today at Mortimer Zuckerman’s piece over at USNews.com, “Brace for an Avalanche of Unfunded Debt.”

It’s so depressing because it’s true. The federal government keeps its books not in ways that most clearly reveal the true financial picture, but in ways designed, quite deliberately, to obscure that picture. This is for the short-term benefit of politicians and nothing else, the country be damned. And, as Zuckerman notes, unless something is done about this, and soon, that is exactly what the country will be.

As he points out, the country is incurring future financial obligations at the rate of $8 trillion a year. That exceeds the total taxable income of everyone earning more than $66,198 a year and all corporate profits. Even a liberal should be able to understand that if future obligations in entitlements are rising at $8 trillion and the total taxable income of the middle class and up, plus corporations, is $7 trillion, “getting the rich to pay their fair share” won’t do the trick.

The good news, of course, is that these future obligations are not like the national debt, which is at $16 trillion and rising fast. The debt is an inescapable obligation because we pledged the “full faith and credit of the United States” when we borrowed the money. The only alternatives don’t bear thinking about: repudiating the debt or inflating it away.

As Zuckerman points out, it costs $359 billion to service the debt at today’s very low interest rates. Should interest rates begin to rise, either because of returning prosperity or a loss of faith by the market, the cost of servicing the debt will increase $150 billion for every percentage point rise in interest rates. We’re currently paying about 2.2 percent on the debt. Greece is paying over 16 percent to borrow money. As they say: you do the math.

Unlike the debt, future entitlement obligations are obligations only because current law says they are, and laws can be changed. For instance, if we were to, 1) change the formula by which cost-of-living increases in Social Security payments are calculated so that it didn’t overstate inflation as the formula does now, and 2) gradually increase the age of eligibility to reflect ever-increasing life expectancy, Social Security would become solvent for the foreseeable future.

The annual cost-of-living adjustment is designed to keep recipients’ purchasing power intact, but it currently gives them, in effect, a raise. Is it really too much to ask of recipients that they get what’s due them, not more? Likewise, would raising the age of eligibility one month for every year future recipients are now under the age of 55 incur unbearable political opposition? Not if politicians, starting with the president, do their jobs and, you know, lead, explaining the truth and showing the way out of trouble. I have a news bulletin for the political class: the American people are neither stupid nor selfish. Tell them the truth and they will accept it.

But to do that—to tell the American people the truth about the financial situation of the country—requires that politicians surrender the power to keep the books in self-serving ways. The country needs just what corporations have: a set of accounting rules they are obliged to follow that reveal the truth, not conceal it, and an independent authority to certify the books as honest and complete, including future obligations. (The Congressional Budget Office, which “scores” legislation, is nonpartisan, but it is by no means independent. It is a creature of Congress and has no choice but to do Congress’s bidding, which is political protection first, the truth a long-way second.)

There will be no long-term solution to the impending financial disaster until the government keeps honest books. The sooner this fact is on the country’s political radar and becomes part of the discussion, the better. There is not a lot of time left.

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Those Courageous Liberals

The question at the heart of the Chuck Hagel controversy was always whether President Obama actually wanted Hagel as his secretary of defense, or whether it was all a gimmick to trick the press into further proclaiming the absurd-beyond-belief characterization of Obama’s cabinet as a “team of rivals.” You would think it would raise some eyebrows that this supposed ream of rivals all agree with each other. But Obama figured the press could be fooled again by appointing a registered Republican to run the Pentagon.

A gimmick, however, is generally not worth fighting for. But to understand why Obama thought the press could be fooled so easily into this nonsense, take a look at yesterday’s National Journal article, which broke the news that the White House is considering dropping Hagel. It’s a well-reported piece that got a scoop where everyone else merely had inklings. But notice the way this straight news story characterizes Hagel’s stand on the Iraq War:

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The question at the heart of the Chuck Hagel controversy was always whether President Obama actually wanted Hagel as his secretary of defense, or whether it was all a gimmick to trick the press into further proclaiming the absurd-beyond-belief characterization of Obama’s cabinet as a “team of rivals.” You would think it would raise some eyebrows that this supposed ream of rivals all agree with each other. But Obama figured the press could be fooled again by appointing a registered Republican to run the Pentagon.

A gimmick, however, is generally not worth fighting for. But to understand why Obama thought the press could be fooled so easily into this nonsense, take a look at yesterday’s National Journal article, which broke the news that the White House is considering dropping Hagel. It’s a well-reported piece that got a scoop where everyone else merely had inklings. But notice the way this straight news story characterizes Hagel’s stand on the Iraq War:

While much of the criticism centers on questions of whether Hagel has been a strong enough supporter of Israel and tough enough on Iran–as well as past comments he made about gay people–he is also paying, in part, for his bluntness and bravery in advocating unpopular positions during his 12 years in the Senate. Hagel’s gutsy and prescient stand against his own party and President George W. Bush in the run-up to the Iraq invasion—and his criticism of the war’s management afterwards—all but cost him his political career, turning him from a possible GOP presidential contender into a pariah within his party.

As John Tabin noted last night, something is missing from the description of Hagel’s “prescient” stand against the Iraq War. And that something would be Hagel’s vote in favor of the Iraq War. What’s more, turning on the war effort when trouble hit was far from constituting “bravery,” as National Journal would have it. It was the popular thing to do.

Beyond the fact that reporters should not be bestowing medals upon politicians in straight news articles such as this, and in addition to the need to actually get the history and the facts right, there is the pattern of the press deciding that whenever a politician takes a stand on an issue that they agree with, it’s brave and courageous.

Hagel didn’t vote against the Iraq War, so his bravery consists of badmouthing Republicans and conservatives. In our current media climate, that is possibly among the least-brave acts one can take. But yesterday’s news also centered on the ongoing controversy over gun control in the wake of the Newtown tragedy–and it followed the same pattern and took the same tone it has since the fatal shooting took place. In a column about gun control, the New York Times’s Nicholas Kristof had earlier asked: “Do We Have the Courage to Stop This?” What kind of courage, specifically, do we need? Kristof answers: “the gumption to stand up to National Rifle Association extremists.”

Of course. Just as in the case of Hagel’s nomination, we hear of powerful lobbies controlling members of Congress. But is it really courageous to attack the NRA? Bashing the NRA has been a daily ritual since the tragedy in Newtown, and both Republican lawmakers and Democratic legislators have said they’re open to adjusting their positions on gun control in favor of stricter rules and in defiance of the NRA.

But of course to the left, listening to interest groups can also be courageous and wise—it just depends on the interest groups. California Governor Jerry Brown is presiding over a fiscal basket case well on its way to becoming a failed state. But the L.A. Times, in discussing how to grade Brown’s year, can’t decide “whether to give him a B-plus, an A-minus or a full A.” What did Brown do to earn such accolades? He raised taxes on the state’s high earners. Specifically, “He merged his tax proposal with a more liberal version sponsored by the California Federation of Teachers.”

So allowing public sector union leaders to write legislation aimed at protecting their benefits by getting to choose who pays for them gets Brown on the dean’s list. It doesn’t seem to matter that the tax increase is already seen as a laughable bit of delusional public policy and that the state’s finances keep getting worse even as Brown and the unions celebrate their victory. When the tax initiative seemed headed for defeat, its supporters in the business community stepped forward to rally support. In another supposed straight news article, the San Francisco Chronicle called supporters of the tax hike “The few and the brave.” In case you didn’t get the point, one of the major liberal groups supporting the measure calls itself the Courage Campaign. After the tax passed, Brown praised the state’s “courageous decision.”

The liberal press knows bravery when it sees it. It’s just a coincidence that by their own criteria, America’s newspaper reporters join the Hagels and Browns up on that pedestal.

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The Right’s Latest Meaningless Purity Test

In a strange about-face today, FreedomWorks has decided to withdraw its support of House Speaker John Boehner’s “Plan B” a day after declaring its support for the plan. Yesterday Dean Clancy, legislative counsel for the group, wrote “Speaker Boehner: Congratulations, you are moving in the right direction. You woke up and realized you have the power to say No to the Left. Stay the course. Go all the way to the FreedomWorks plan, and you’ll have it made in the shade.” This comes as the Heritage Foundation continues to beat the drums against Boehner’s plan, calling it, “the latest unsatisfactory proposal put forward by Speaker John Boehner (R-OH) to avoid the fiscal cliff. Boehner’s plan would protect most Americans, except for millionaires, from a tax hike. But even this is a poor fix because it ignores the real problem: spending.” Heritage’s more flexible legislative arm (due to tax restraints on the non-profit Heritage Foundation), declared, “Heritage Action opposes ‘Plan B’ and will include it as a key vote on our legislative scorecard.” Club for Growth has also been forceful with its opposition to the plan, joining smaller Tea Party groups. 

While conservatives are eating their own over the plan, Senate Democrats have announced that they have no plans to vote on Boehner’s “Plan B,” even if it passes a House vote, as many are promising it will. The bill will therefore be dead on arrival, despite the fact that Senate Democrats voted for a similar plan almost exactly two years ago. There are no other plans under discussion from congressional Republicans, who are spending as much time fighting with conservative groups as they are with their Democratic counterparts. 

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In a strange about-face today, FreedomWorks has decided to withdraw its support of House Speaker John Boehner’s “Plan B” a day after declaring its support for the plan. Yesterday Dean Clancy, legislative counsel for the group, wrote “Speaker Boehner: Congratulations, you are moving in the right direction. You woke up and realized you have the power to say No to the Left. Stay the course. Go all the way to the FreedomWorks plan, and you’ll have it made in the shade.” This comes as the Heritage Foundation continues to beat the drums against Boehner’s plan, calling it, “the latest unsatisfactory proposal put forward by Speaker John Boehner (R-OH) to avoid the fiscal cliff. Boehner’s plan would protect most Americans, except for millionaires, from a tax hike. But even this is a poor fix because it ignores the real problem: spending.” Heritage’s more flexible legislative arm (due to tax restraints on the non-profit Heritage Foundation), declared, “Heritage Action opposes ‘Plan B’ and will include it as a key vote on our legislative scorecard.” Club for Growth has also been forceful with its opposition to the plan, joining smaller Tea Party groups. 

While conservatives are eating their own over the plan, Senate Democrats have announced that they have no plans to vote on Boehner’s “Plan B,” even if it passes a House vote, as many are promising it will. The bill will therefore be dead on arrival, despite the fact that Senate Democrats voted for a similar plan almost exactly two years ago. There are no other plans under discussion from congressional Republicans, who are spending as much time fighting with conservative groups as they are with their Democratic counterparts. 

Could there possibly be a bigger waste of time than what is currently taking place? Conservatives are at each other’s throats fighting over a plan that has no chance thanks to a Democratically controlled Senate and White House. Once upon a time, conservatives understood that the only chance at passing conservative legislation was by holding those branches of government, as Philip Klein pointed this out today in the Washington Examiner,

If all it takes to enact a conservative agenda is to hold one chamber of Congress, then why did conservative activists work so hard for Republicans to win control of the Senate? Why did they spill so much sweat in an effort to defeat Obama, even though it meant supporting Mitt Romney?

Klein goes on to say “Conservatives should acknowledge that some sort of compromise is inevitable. But that doesn’t mean they have to swallow anything that Boehner cooks up.” While these groups don’t have to go along with Boehner’s plan, if they plan to spend their precious political capital fighting “Plan B” they need to at least have an alternative that House Republicans can work with. While many of these groups have their own proposals, none stands a chance at passage through a Democratically controlled Senate, nor will Obama sign them.

During the primary season when opposition to Mitt Romney was at its peak, a group of conservatives started a group called the Not Mitt Romney coalition. The group spent its time fighting the eventual choice of Romney as the Republican nominee. From early on, it became clear that Romney was the most viable of all possible picks in a slim Republican field of candidates, and despite this, conservatives continued to fight his nomination instead of trying to find and recruit an alternative who would be more acceptable to their base (with the exception of the Weekly Standard‘s editor Bill Kristol, who famously spent months trying to draft reluctant Republicans into running). By the time Romney secured the nomination, a great deal of his campaign’s energy, money and political capital was spent battling his eventual nomination with fellow Republicans instead of building his case against Barack Obama. In campaign post-mortems, many of Romney’s top staff attributed their loss in part to this lengthy and nasty primary battle. 

If conservatives have learned anything from that primary experience, it’s that along with principled stands against objectionable legislation or politicians, they need to provide acceptable alternatives. It’s easy to declare that something or someone fails the conservative litmus test, but in order for Republicans to move past the label as the “Party of No” (which inevitably leads to plummeting approval ratings), they need to start offering reasonable solutions. 

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The Difference Between a Concession and a Confession

One of the arguments some intelligent conservatives are making is that if Republicans agree to increase rates on the top earners in America, it will do irreparable damage to the GOP. The basic case goes like this:

If Obama succeeds and ends up getting a confession from Republicans that tax cuts are the problem, tax cuts are the cause, what happens to the next Republican who campaigns on tax cuts? Not going to have a prayer.

Now it may well be that raising tax rates will do significant damage to the Republican Party. It may be substantively unwise. And I’m certainly sympathetic to Republicans not wanting to play a role in something they think is bad policy.

But here’s where I think this analysis is wrong.

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One of the arguments some intelligent conservatives are making is that if Republicans agree to increase rates on the top earners in America, it will do irreparable damage to the GOP. The basic case goes like this:

If Obama succeeds and ends up getting a confession from Republicans that tax cuts are the problem, tax cuts are the cause, what happens to the next Republican who campaigns on tax cuts? Not going to have a prayer.

Now it may well be that raising tax rates will do significant damage to the Republican Party. It may be substantively unwise. And I’m certainly sympathetic to Republicans not wanting to play a role in something they think is bad policy.

But here’s where I think this analysis is wrong.

If Republicans agreed to raise the rates on the top income earners in America, it would not be a “confession” that tax cuts are the problem. It would be a concession–one done in order to (a) keep something worse from happening (e.g., higher taxes on everyone, not just the top 2 percent of income earners; and/or the economic damage caused by going over the fiscal cliff) or (b) extracting something better in return (for example, entitlement reforms).

Whether the concession is worthwhile depends on the details of a deal. But conservatives should bear in mind that even a politician as principled as Ronald Reagan agreed to tax increases as part of broader deals. Indeed, Reagan agreed to what at the time was the largest tax increase in American history (the TEFRA tax).

It’s true that Reagan came to regret that decision. But the reason is that he never got the spending cuts he asked for in exchange for the tax increase he reluctantly agreed to. If he had, Reagan would have defended his decision on the grounds that the tax increases, which as a general matter he strongly opposed, were worth what he was able to get in return (spending cuts). And even though Reagan had agreed to tax increases in 1982, he and his party were still able to champion tax cuts in 1984. 

My guess is at the end of the day, Speaker Boehner will (wisely) not agree to raise the top rates, given how obstinate and unreasonable President Obama has shown himself to be. But even if Boehner does agree to an increase in the top rates, it will be a concession, not a confession.

Ronald Reagan agreed to tax increases and in the process didn’t ruin the GOP brand, and neither would John Boehner. 

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The High Cost of Dems’ Cheap Populism

Last week, I wrote about the fact that President Obama’s approach to taxes as part of the “fiscal cliff” negotiations is billed as taxing the rich but would end up hurting the poor and possibly deepening inequality. Policies built on the flimsy populism of “fairness”–at least as modern Democrats define it–are quite often devoid of economic common sense. What’s more, the Democrats seem to know this.

The New York Times offers a “News Analysis” today in which it is revealed that the Republicans are right on the merits of most of the arguments, but Obama and congressional Democrats have boxed themselves in by relentlessly demagoguing the issue. Here’s the Times:

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Last week, I wrote about the fact that President Obama’s approach to taxes as part of the “fiscal cliff” negotiations is billed as taxing the rich but would end up hurting the poor and possibly deepening inequality. Policies built on the flimsy populism of “fairness”–at least as modern Democrats define it–are quite often devoid of economic common sense. What’s more, the Democrats seem to know this.

The New York Times offers a “News Analysis” today in which it is revealed that the Republicans are right on the merits of most of the arguments, but Obama and congressional Democrats have boxed themselves in by relentlessly demagoguing the issue. Here’s the Times:

The mounting concentration of wealth is even more dramatic. A recent Economic Policy Institute study found that between 1983 and 2010 about three-quarters of all new wealth accrued to the wealthiest 5 percent of households. Over the same period, the bottom 60 percent actually became poorer.

Such figures are why some Democrats argue that even if the economy were to return to Clinton-era growth rates, its poor and middle class could not stomach a return to Clinton-era tax rates, at least not yet.

Why can’t the economy handle going back to Clinton-era tax rates? “In part, that is because the economy is still growing slowly, and tax increases have the potential to weaken it,” the Times explains. So higher taxes would indeed impede economic growth. But the Democrats only expect to protect the non-rich from tax increases for a limited time. They’re coming after the middle class too. The Times continues:

“It’s perfectly reasonable for the White House to begin collecting more revenue from folks who have done by far the best in pretax terms,” said Jared Bernstein of the Center on Budget and Policy Priorities, a former economist for Vice President Joseph R. Biden Jr. “But ultimately we can’t raise the revenue we need only on the top 2 percent.”

Well, you could solve some of the revenue problem by cutting spending. But the Democrats’ long-term strategy is to do the opposite. Republicans often complain that Obama wants a GOP House to cooperate on his terms, in order to essentially make the GOP the tax collectors for the welfare state. And as the Times notes, that’s exactly right:

“The goal is not just to make the tax code more progressive, but also to obtain adequate revenue to finance progressive spending programs,” said Peter Orszag, a vice chairman at Citigroup and a former White House budget director. “Making the tax code more progressive but locking into a vastly inadequate revenue base is not doing the notion of progressivity overall any favors.”

So the left can at least claim that they want your money in order to give it back to you in the form of benefits. It’s for your own good. Except, as the Times notes, it’s not:

The Congressional Budget Office has found that between 1979 and 2007, the top 1 percent of households saw their inflation-adjusted income grow 275 percent. For the bottom 20 percent, it grew just 18 percent, and federal tax and transfer programs also did less and less to reduce income inequality over that period.

To recap: Democrats don’t want to raise taxes on the middle class right at this moment, because those tax hikes would harm economic growth, especially for the middle class. But they do want to enact those damaging tax hikes on the middle class at some point, because they want to increase, not decrease, federal spending in the face of mounting debt and deficits. That might hurt the middle class, but the tax revenue gained from it would be spent in part on federal transfer programs intended to reduce inequality, though they won’t succeed in doing that either.

It’s almost as if near-term political gain and populist theater, and not economics, are driving Obama’s approach to policy.

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Nearly Half of Republicans Say Obama Has “Mandate” on Taxes

Another day, another bad “fiscal cliff” poll for the GOP. Bloomberg finds that nearly half of Republicans agree that the presidential election has given Obama a mandate to raise tax rates on the top income bracket:

The president goes into talks with Republicans amid broad public sentiment that his victory is a sign the electorate has spoken in favor of his positions on taxes and entitlements.

Sixty-five percent of Americans say the Nov. 6 results gave Obama a “mandate” on his proposal to raise tax rates on income over $250,000 and “to get it done.” Forty-five percent of Republicans agree.

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Another day, another bad “fiscal cliff” poll for the GOP. Bloomberg finds that nearly half of Republicans agree that the presidential election has given Obama a mandate to raise tax rates on the top income bracket:

The president goes into talks with Republicans amid broad public sentiment that his victory is a sign the electorate has spoken in favor of his positions on taxes and entitlements.

Sixty-five percent of Americans say the Nov. 6 results gave Obama a “mandate” on his proposal to raise tax rates on income over $250,000 and “to get it done.” Forty-five percent of Republicans agree.

At what point do Republicans get so fed up that they just give up and let the Democratic Party take the blame for the fallout from raising taxes during an economic downturn? For Senator Rand Paul, it sounds like that time has come

“I think what we should do first of all is put forward what we’re for. So if you’re in the House, the House leadership should put forward something that extends the Bush tax cuts forever and has significant spending cuts. And I think they pass that. If the Democrats won’t accept that and we’re unwilling to stay by our position, then I would say, let them pass a tax increase on the upper income folks, but let them do it with their votes not our votes. Republicans vote present in the House. Democrats can pass the tax increase with only Democrat votes. And then, the Democrats are the party of high taxes and the Republicans, we’re the party of lower taxes. And I think that’s the way it should be. …

Don’t give in by splitting the baby. Give in by voting present, let the Democrats pass an increase in the upper tax brackets. it comes over to the Senate, Republicans vote no, and it becomes a Democrat tax increase but not a Republican/Democrat tax increase, which I think is a mistake for Republicans.”

That would seem to pass Grover Norquist’s “no fingerprints” test. Republicans in the Senate will be attacked for voting no on a middle-class tax cut extension, but at least they won’t be saddled with blame over the top bracket tax hike. Also, the fact that Rand Paul is endorsing this proposal might make it a bit more palatable for Tea Party groups.

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A Clash of Mandates

All throughout the debate over Obamacare, polls showed the public opposed to the bill. That did nothing to stop Democrats from pushing the legislation through Congress, of course, and voters responded by staying true to their word: they voted out congressional Democrats in historic numbers in the next election. Democrats and the national media generally ignore inconveniences like voters when the opportunity arises to pass far-reaching legislation, but that instinct has kicked in on other matters as well.

For example, the New York Times has discovered that the current “fiscal cliff” negotiations pose something of a problem for democratically elected representatives whose constituents don’t want them to raise taxes. It turns out that Democrats are right when they say “elections matter”–though not only the presidential election. Now that the push for some tax increases as part of a final deal is gaining momentum, Republicans elected by voters who oppose such tax hikes are caught between representing the will of their electors and what liberal editorial boards tell them is the good of the country:

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All throughout the debate over Obamacare, polls showed the public opposed to the bill. That did nothing to stop Democrats from pushing the legislation through Congress, of course, and voters responded by staying true to their word: they voted out congressional Democrats in historic numbers in the next election. Democrats and the national media generally ignore inconveniences like voters when the opportunity arises to pass far-reaching legislation, but that instinct has kicked in on other matters as well.

For example, the New York Times has discovered that the current “fiscal cliff” negotiations pose something of a problem for democratically elected representatives whose constituents don’t want them to raise taxes. It turns out that Democrats are right when they say “elections matter”–though not only the presidential election. Now that the push for some tax increases as part of a final deal is gaining momentum, Republicans elected by voters who oppose such tax hikes are caught between representing the will of their electors and what liberal editorial boards tell them is the good of the country:

“We ran aggressively talking about taxes and growth and spending, as did the president,” said Representative Sean P. Duffy, a first-term Republican from Wisconsin, who despite being a top target of Democrats easily won re-election by 12 percentage points. “The president keeps talking about his mandate. Well, he doesn’t have a mandate in the Seventh District.”…

“My constituents want me to stand firm on cutting spending. I campaigned on that issue. That’s why they elected me,” said Representative Ted Poe, Republican of Texas, who won re-election with 65 percent of the vote. “I don’t see any scenario where raising tax rates, in any combination of compromise, will solve our problem.”

Of the 234 House Republicans who will sit in the 113th Congress, 85 percent won re-election with 55 percent of the vote; more than half of next year’s House Republican Conference won more than 60 percent. And virtually every one of them ran on holding the line against tax increases and the Obama agenda.

This is not a simple problem for the lawmakers; polls do indeed show national support for some tax hikes. In Duffy’s case, Obama did win his state running on a platform of soaking “the rich.” Duffy can honestly respond that he won his district by promising to be a check on Obama’s agenda, and that his district is what matters to him, since he doesn’t represent the whole state.

I’m betting you can guess what the Times wants him to do:

Given the electoral dynamics, the lawmakers who are broaching the possibility of raising tax rates as a way to strike a deal and prevent the possibility of a recession are beginning to appeal to House members with a term not heard often in the House — the national interest.

It’s the “national interest” vs. those pesky voters. The article does offer some clarity, though. This, combined with the Politico/George Washington University poll released yesterday, proves the utter silliness of the Democrats’ argument that Republicans are simply doing the bidding of anti-tax activist Grover Norquist. Sure, Republicans have signed a pledge not to raise taxes, but their voters haven’t–and they still don’t want the tax hikes. In fact, not only did they not sign a pledge to Norquist, they generally don’t even know who he is. From the Post’s Chris Cillizza:

For all the focus in Washington on Americans for Tax Reform’s Grover Norquist, he remains an almost entirely unknown figure nationally.  More than six in 10 (61 percent) of those tested had never heard of Norquist while another 15 percent had no opinion of him.  Among those who did have an opinion, eight percent regarded him favorably while 18 percent viewed him in an unfavorable light.  The idea that the fiscal cliff fight is a proxy war over Norquist then seems far-fetched.

Well, yes. It does more than seem farfetched. It was ever thus. But you didn’t need a poll to tell you that. Just listen to Norquist himself. When he was criticized by Senator Tom Coburn over the pledge, Norquist said: “He took the pledge — not to me, to the voters.” And as Ezra Klein reported here, the pledge helps Republicans get elected–and keeping the pledge helps them stay elected. If opposing tax increases were a losing issue with voters the pledge simply wouldn’t have that effect.

This is not an argument on behalf of taking the pledge. But when discussions of the pledge and of Republicans (especially in the House) who are reluctant to raise taxes exclude the voters, they miss the point. It may or may not be the right thing to do to raise taxes as part of the effort to stave off the fiscal cliff. But as even the Times has come to realize, Obama is not the only one with a mandate.

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Gallup: Americans Want Fiscal Cliff Compromise

The latest Gallup poll has two interesting, and seemingly contradictory, findings:

President Barack Obama and Speaker of the House John Boehner met at the White House on Sunday, but there has yet been no announcement of a negotiated agreement to avoid the mandated sequestration of government funds for defense and other federal spending, and the increase in tax rates for most taxpayers.

Seventy-three percent of Democrats want their leaders to compromise, little changed from 71% last week. But Republicans and independents express more widespread interest in compromise than they did last week — with Republicans moving from 55% to 67% in favor of compromise, while independents moved from 61% to 70%.

So Americans seem to want compromise — in theory. In reality, President Obama is still getting much higher approval ratings than Republican leaders in congress in the same Gallup poll (48 percent compared to 26 percent), even though he has been the party most unwilling to compromise. 

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The latest Gallup poll has two interesting, and seemingly contradictory, findings:

President Barack Obama and Speaker of the House John Boehner met at the White House on Sunday, but there has yet been no announcement of a negotiated agreement to avoid the mandated sequestration of government funds for defense and other federal spending, and the increase in tax rates for most taxpayers.

Seventy-three percent of Democrats want their leaders to compromise, little changed from 71% last week. But Republicans and independents express more widespread interest in compromise than they did last week — with Republicans moving from 55% to 67% in favor of compromise, while independents moved from 61% to 70%.

So Americans seem to want compromise — in theory. In reality, President Obama is still getting much higher approval ratings than Republican leaders in congress in the same Gallup poll (48 percent compared to 26 percent), even though he has been the party most unwilling to compromise. 

It shows you what the GOP is up against here. Even though House Republican leadership has been open to concessions on tax revenue, it still can’t shake the “obstructionist” label. And even though President Obama has refused to take any step toward the GOP position, he’s still viewed as more willing to compromise. Republicans are dealing with more than just a political problem — they’re dealing with a deep-seated image problem, created largely by the media. Before they can persuade the public that they’re right about taxes, they’re going to have to tackle their public image issues.

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What If Conservatives Have Lost the Argument?

The debate over the “fiscal cliff” is an important tactical one and could have widespread political ramifications. There are complicated issues to consider. Should the Republicans give in to Mr. Obama’s demand that we raise the top tax rates? If so, what should they demand in return? If they don’t get it, is it more prudent to retreat in order to fight another day on more advantageous ground for the GOP? Or should Republicans be willing to go cliff diving with the president, confident that in the end Obama will own any future recession?

Whatever the answer to these tactical questions, the fiscal cliff raises a broader question for conservatism: What do you do when you’ve lost an argument, at least for now? In the post-election ABC News/Washington Post poll, for example, 60 percent of respondents said they support raising taxes on incomes over $250,000 a year. That’s not surprising, since to the degree that there was a centerpiece to the president’s economic argument during the 2012 election, it was to do just that. Mr. Obama was not only re-elected on that platform; he won by a comfortable margin. In the Senate, Democrats gained two seats while in the House they gained eight seats.

So here’s something to consider. Assume for the sake of the argument that this debate has been engaged and adjudicated by the public–and the public prefers the liberal solution (raising taxes on the “rich” in the name of “fairness”). Does the conservative movement, in order to maintain its strength and appeal, make peace with the public’s view? Or attempt to change it? And if so, how?

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The debate over the “fiscal cliff” is an important tactical one and could have widespread political ramifications. There are complicated issues to consider. Should the Republicans give in to Mr. Obama’s demand that we raise the top tax rates? If so, what should they demand in return? If they don’t get it, is it more prudent to retreat in order to fight another day on more advantageous ground for the GOP? Or should Republicans be willing to go cliff diving with the president, confident that in the end Obama will own any future recession?

Whatever the answer to these tactical questions, the fiscal cliff raises a broader question for conservatism: What do you do when you’ve lost an argument, at least for now? In the post-election ABC News/Washington Post poll, for example, 60 percent of respondents said they support raising taxes on incomes over $250,000 a year. That’s not surprising, since to the degree that there was a centerpiece to the president’s economic argument during the 2012 election, it was to do just that. Mr. Obama was not only re-elected on that platform; he won by a comfortable margin. In the Senate, Democrats gained two seats while in the House they gained eight seats.

So here’s something to consider. Assume for the sake of the argument that this debate has been engaged and adjudicated by the public–and the public prefers the liberal solution (raising taxes on the “rich” in the name of “fairness”). Does the conservative movement, in order to maintain its strength and appeal, make peace with the public’s view? Or attempt to change it? And if so, how?

These questions are too large to tackle in a single post. I simply want to highlight a temptation all of us in politics face, which is to assume that because we hold a certain view, a majority of the public does, too. Those who hold this mindset usually fall back on an explanation that goes something like this: Republican politicians simply didn’t make sufficiently forceful and articulate arguments. If they had, the public would flock to our side since, after all, the arguments are all on our side.

The people who take comfort in this explanation usually reside in the “we have a communications problem” school. They lament the fact that we don’t have another Ronald Reagan to articulate conservatism and if we did, all would be right with the world once more.

I’m partially sympathetic to this view, since it would be a mistake to underestimate the importance of quality candidates in advancing an intellectual cause. At the same time, it’s unwise to pin one’s hopes on producing, election after election, a candidate who possesses a once-in-a-lifetime set of skills. And Reagan himself, by 1980, had made peace with major elements of the New Deal (something he had not done in 1964).

As for the here and now: I’m actually conflicted as to what strategy Republicans ought to adopt in their battle with the president over the fiscal cliff, since I believe there are real downsides to capitulating on raising taxes on the top income earners. But however this issue resolves itself, conservatives should be careful not to assume that the problems we face are merely (or mostly) rhetorical. 

It may be that a majority of the public, having heard both sides of the argument, believes that upper-income people are under-taxed. If that’s the case, it would be a significant error for conservatives to assume we simply need to make the same arguments, only louder, with more passion, and with more charts and graphs. It may be that we have to reframe the issue. Or it may be that we have to accept that waging the fight on this ground is injurious to the larger conservative cause. This is a discussion conservatives need to have in a calm, empirical way, resisting the impulse (on all sides) to either purge or impugn motivations — and to bear in mind that if conservatives give in to Obama’s demands, it may be a mistake but it wouldn’t be a violation of a high principle. Deciding on whether the top tax rate should be 35 percent or 39.6 percent, or somewhere in between, is a prudential, not  quasi-theological, argument. 

A final, related point: Conservatives have to be alert to shifting circumstances. Today we face challenges – including wage stagnation, lack of social mobility, globalization, income inequality, fracturing families, and an entitlement crisis — that are in some respects quite different, or at least more acute, than the ones we faced in 1980, when the threats we faced included soaring interest rates, high inflation, and a top marginal rate of 70 percent. This doesn’t mean that the arguments about tax rates and the size of government are passé. But it does mean conservatism has to take into account a realistic assessment of the sentiments of the public – not in order to bow before them, but to be better able to shape them.

This is not, as some might suggest, an argument to abandon conservatism. It’s rather an argument to revivify it.

 

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RE: Poll: 60% Support Tax Hikes on the Wealthy

I certainly agree with Alana that the Republicans are in a tough spot. But I’m not sure how valid any of these polls about public opinion on the issue are. Unlike when the choice is either A or B, as those are the only two candidates in an election, polls on public issues depend crucially on exactly how they are worded. And even when worded in a neutral manner (not an easy thing to achieve even when the pollster is trying to be honest), I’m not sure they mean that much in terms of political consequences down the road.

No matter what the Republicans do, the permanent Obama campaign—sorry, I mean the mainstream media—will hammer them. So they might as well do what’s right.

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I certainly agree with Alana that the Republicans are in a tough spot. But I’m not sure how valid any of these polls about public opinion on the issue are. Unlike when the choice is either A or B, as those are the only two candidates in an election, polls on public issues depend crucially on exactly how they are worded. And even when worded in a neutral manner (not an easy thing to achieve even when the pollster is trying to be honest), I’m not sure they mean that much in terms of political consequences down the road.

No matter what the Republicans do, the permanent Obama campaign—sorry, I mean the mainstream media—will hammer them. So they might as well do what’s right.

I’m not surprised that 60 percent want taxes raised on the wealthy. This is taxing the man behind the tree, in Senator Russell Long’s famous description of the art of taxation, as almost no one considers himself to be “rich.”

Equally, I am not surprised that 64 percent want to raise taxes on large corporations. I wonder what percentage of that 64 percent know that the United States already has the highest corporate taxes in the world? Maybe 10 percent? The average man in the street has little understanding of the realities of such public policy questions, which obsess only the chattering classes. Polling them doesn’t provide useful information, it only provide ammunition for one side or the other to use.

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Poll: 60% Support Tax Hikes on the Wealthy

More bad fiscal cliff news for Republicans, from the Politico/GWU Battleground Poll today:

A new POLITICO/George Washington University Battleground Poll finds that 60 percent of respondents support raising taxes on households that earn more than $250,000 a year and 64 percent want to raise taxes on large corporations.

Even 39 percent of Republicans support raising taxes on households making more than $250,000. Independents favor such a move by 21 percentage points, 59 to 38 percent.

Only 38 percent buy the GOP argument that raising taxes on households earning over $250,000 per year will have a negative impact on the economy. Fifty-eight percent do not.

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More bad fiscal cliff news for Republicans, from the Politico/GWU Battleground Poll today:

A new POLITICO/George Washington University Battleground Poll finds that 60 percent of respondents support raising taxes on households that earn more than $250,000 a year and 64 percent want to raise taxes on large corporations.

Even 39 percent of Republicans support raising taxes on households making more than $250,000. Independents favor such a move by 21 percentage points, 59 to 38 percent.

Only 38 percent buy the GOP argument that raising taxes on households earning over $250,000 per year will have a negative impact on the economy. Fifty-eight percent do not.

As much as I’ve held out hope that the Wall Street Journal and others are right that sticking to principles is the correct move, what do you do if the public disagrees? Maybe the GOP needs to come to terms with that. This doesn’t mean conservatives are wrong on the tax issue, it just means there may not be a way to win this political battle at the moment.

At the Weekly Standard, Bill Kristol makes a very persuasive case for that:

The Journal editors believe that after January 1, when taxes will have gone up for everyone, House Republicans will block Democratic legislation that would cut taxes—that would restore the lower 2012 rates for the vast majority of taxpayers, fix the Alternative Minimum Tax, and for that matter would probably offer a compromise on dividends and the death tax better than what will be the new dividend rate of 39 percent and death tax of 55 percent with a $1 million exemption.

Will Republicans really oppose such legislation? President Obama will be beating the drums for this tax cut. Senate Democrats will pass this tax cut. If Senate Republicans vote against it, it won’t be “Senate Democrats running for re-election in 2014” who will have a tax hike on their resumes. It will be Senate Republicans who will have voted against cutting taxes. And if House Republicans block such legislation, it will be they, and they alone, insisting on higher taxes.

Of course they won’t. Republicans will fold with lightning speed after we go over the tax cliff on January 1. Which is why the third of the Journal editorial’s three key paragraphs is moot. If we go over the cliff, there won’t be damage to Obama’s chances of second-term success. Quite the contrary. What Republicans will have done is to make Democrats the party of tax cuts and Obama a president fighting for economic growth.

As I say, it won’t happen. Most Republicans will go along soon after January 1 with what will now be the Democrats’ tax cutting agenda. If the House Republicans now follow the Wall Street Journal editors over the cliff, the only effect, I’m afraid, will be to turn a manageable tactical retreat in December into a panicked strategic rout in January.

The WSJ board is right that GOP infighting isn’t helpful for negotiations. But two facts remain: 1.) Americans largely agree with Obama on tax hikes; and 2.) Republicans will be blamed if the country goes over the cliff.

Because of that, Obama shows no sign of backing down, nor does he need to. Even if Republicans stop fighting amongst themselves, Obama is not stupid. He knows the impossible position they’re in — heads he wins, tails they lose. The question is, which loss is the least damaging for the GOP? As the Israelis say, “don’t be right, be smart.” Republicans might want to keep that one in mind.

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Fair Share

For some time now, liberals have been demanding—their visages positively aglow with sweet reasonableness—that “the rich” should pay their “fair share” in taxes in order to help the government meet its expenses. Let’s leave aside the fact that they often make up the numbers and manipulate the statistics to suit themselves. (For instance, last year President Obama said that closing loopholes, etc., could produce $1.2 trillion in taxes, now he says it couldn’t produce $800 billion, so only raising marginal rates can force the rich to disgorge their fair share.)

No one can really argue with the proposition that the rich should pay their fair share. Of course they should, just like everyone else. But who are the rich and what is their fair share?

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For some time now, liberals have been demanding—their visages positively aglow with sweet reasonableness—that “the rich” should pay their “fair share” in taxes in order to help the government meet its expenses. Let’s leave aside the fact that they often make up the numbers and manipulate the statistics to suit themselves. (For instance, last year President Obama said that closing loopholes, etc., could produce $1.2 trillion in taxes, now he says it couldn’t produce $800 billion, so only raising marginal rates can force the rich to disgorge their fair share.)

No one can really argue with the proposition that the rich should pay their fair share. Of course they should, just like everyone else. But who are the rich and what is their fair share?

The president argues that a single person earning over $200,000 ($250,000 for a married couple) is rich. Democratic Senator Chuck Schumer suggests that a million a year should define the rich. (He also sees nothing wrong with hedge-fund zillionaires—generous suppliers of cash to his re-election campaigns—paying only 15 percent on their eight- and even nine-figure incomes, thanks to the most egregious tax loophole on the planet, “carried interest.”) In fact, since “rich” is purely a relative term, most people define the group as consisting of everyone who earns substantially more than they earn themselves.

But at least people are willing to say who constitute “the rich.” What I have never heard is a liberal actually stating what percentage of marginal income it would be “fair” to tax away from them. And, needless to say, the wholly-owned Obama campaign subsidiary—aka the mainstream media—isn’t about to ask.

To do so, of course, would be to force Harry Reid, Nancy Pelosi, Debby Wasserman Schultz, et al, to either name a figure that would be used against them the next time they want to raise taxes, or to shamelessly prevaricate. Heaven knows they are well practiced in the latter. But honest reporters (I know, I know, but there actually are some) would do the country a favor by asking the question anyway, over and over again. To watch them dance around and desperately change the subject would at least be entertaining and might even show people how shameless they actually are.

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WH Running Out Clock on Fiscal Cliff Negotiations?

Because Republicans are more likely to be blamed for any fiscal cliff fallout, the closer they get to the deadline the more pressure they’ll be under to make concessions. Which is why the White House is slow-walking negotiations, according to John Boehner:

Speaker John Boehner (R-Ohio) accused the White House Friday of trying to “slow-walk” the “fiscal cliff” negotiations.

Boehner said there was “no progress” in the talks just three weeks before tax hikes and spending cuts are set to kick in, and expressed frustration that President Obama hasn’t made a counter-offer to the GOP’s proposal of $800 billion in new tax revenue as part of a $2.2 trillion deficit-reduction plan. 

“This isn’t a progress report, because there’s no progress to report,” Boehner said in a brief press conference at the Capitol. 

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Because Republicans are more likely to be blamed for any fiscal cliff fallout, the closer they get to the deadline the more pressure they’ll be under to make concessions. Which is why the White House is slow-walking negotiations, according to John Boehner:

Speaker John Boehner (R-Ohio) accused the White House Friday of trying to “slow-walk” the “fiscal cliff” negotiations.

Boehner said there was “no progress” in the talks just three weeks before tax hikes and spending cuts are set to kick in, and expressed frustration that President Obama hasn’t made a counter-offer to the GOP’s proposal of $800 billion in new tax revenue as part of a $2.2 trillion deficit-reduction plan. 

“This isn’t a progress report, because there’s no progress to report,” Boehner said in a brief press conference at the Capitol. 

The White House’s refusal to negotiate on tax rates has little to do with economic concerns — ending tax cuts for top earners would make barely a dent in the deficit. As Charles Krauthammer writes, it’s all part of Obama’s longer political game:

Such nonsense abounds because Obama’s objective in these negotiations is not economic but political: not to solve the debt crisis but to fracture the Republican majority in the House. Get Boehner to cave, pass the tax hike with Democratic votes provided by Minority Leader Nancy Pelosi and let the Republican civil war begin.

It doesn’t even matter whether Boehner gets deposed as speaker. Either way, the Republican House would be neutered, giving Obama a free hand to dominate Washington and fashion the entitlement state of his liking.

Democrats have a tough road to taking back the House in 2014. But if Republican leadership caves on tax hikes, conservative members will revolt, and incumbents up for reelection may be faced with a primary backlash. Obviously that could make it easier for Democrats to compete for the seats.

But if Republicans don’t cave, and go off the cliff, they’ll get blamed for the economic fallout. Most Democrats seem confident the GOP won’t let this happen, and will be willing to make serious concessions to avoid it. Krauthammer suggests Republicans call that bluff:

What should Republicans do? Stop giving stuff away. If Obama remains intransigent, let him be the one to take us over the cliff. And then let the new House, which is sworn in weeks before the president, immediately introduce and pass a full across-the-board restoration of the George W. Bush tax cuts.

Obama will counter with the usual all-but-the-rich tax cut — as the markets gyrate and the economy begins to wobble under his feet.

Result? We’re back to square one, but with a more level playing field. The risk to Obama will be rising and the debt ceiling will be looming. Most important of all, however, Republicans will still be in possession of their unity, their self-respect — and their trousers.

The White House will still try to blame the GOP for the economic consequences. But plenty of Democrats are already on the record arguing that going off the fiscal cliff isn’t the end of the world. If Republicans can somehow pull a better deal out of it, that could be the best of a lot of bad options.

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Barack Obama as Captain Ahab

One of the things that has become apparent during the presidential campaign and now, during the negotiations over how to avoid the “fiscal cliff,” is the importance the president places on raising the rates on the top 2 percent of income earners. I’ve written before on why I believe conservatives shouldn’t make a “no new taxes” pledge and why keeping the top rate at 35 percent (which I support) isn’t a matter of high principle.

At the same time, Speaker John Boehner and House Republicans–who after all have been willing to put $800 billion in revenues (through closing loopholes and deductions) on the table–have been far more open to compromise than President Obama, who has not given an inch. In particular, the president has made it clear that he would gladly go over the fiscal cliff rather than give up on his obsession to raise tax rates on the top 2 percent.

For Obama, the top two percent are the Great White Whale–and he is Captain Ahab.

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One of the things that has become apparent during the presidential campaign and now, during the negotiations over how to avoid the “fiscal cliff,” is the importance the president places on raising the rates on the top 2 percent of income earners. I’ve written before on why I believe conservatives shouldn’t make a “no new taxes” pledge and why keeping the top rate at 35 percent (which I support) isn’t a matter of high principle.

At the same time, Speaker John Boehner and House Republicans–who after all have been willing to put $800 billion in revenues (through closing loopholes and deductions) on the table–have been far more open to compromise than President Obama, who has not given an inch. In particular, the president has made it clear that he would gladly go over the fiscal cliff rather than give up on his obsession to raise tax rates on the top 2 percent.

For Obama, the top two percent are the Great White Whale–and he is Captain Ahab.

The question is why. Captain Ahab’s neurotic obsession was understandable (Moby Dick, after all, had destroyed his boat and bit off his leg). So what explains Mr. Obama’s obsession?

It can’t be what he claims, which is improving the economy or reducing the deficit. As Charles Krauthammer pointed out, “the alleged curative effect on debt of Obama’s tax-rate demand — the full rate hike on the ‘rich’ would have reduced the 2012 deficit from $1.10 trillion to $1.02 trillion. That’s a joke, a rounding error.”

So if what is driving Obama isn’t an economic argument, what else might it be? Part of it is, as Krauthammer argues, political. Mr. Obama believes forcing Republicans to agree to raise tax rates on the top bracket will fracture the party. But there may be something else at play as well. Barack Obama is a man of the left, a proud progressive, and what animates the left today isn’t a positive vision to achieve the common good; it’s a seething resentment toward those who are successful and a commitment to make them pay more in the name of “fairness.”

To understand the president’s worldview, it’s worth recalling some of the most revealing statements he’s made over the last four years. The first is his response to Charles Gibson during a 2008 debate with Hillary Clinton, when Obama said he would favor raising capital-gains taxes in the name of fairness–even if doing so would create a net revenue loss. The second was Obama’s comments to Joe Wurzelbacher, also made in 2008, that “when you spread the wealth around, it’s good for everybody.” And the third took place in 2012 when the president said, “If you’ve got a business — you didn’t build that.  Somebody else made that happen.”

Mr. Obama’s aim when it comes to taxes, then, isn’t, as he and other liberals often argue, simply to raise revenues. Rather, it is to advance their understanding of “fairness,” which they take to be synonymous with justice, both taken to mean that the top earners in America, at every given moment in time, aren’t sacrificing enough in the form of higher taxes. They should always pay more.

If there were no political or institutional checks on Obama, I’m quick sure he’d tax the top 2 percent at a much higher rate than he’s arguing for now (39.6 percent). But just like he was willing to jettison his commitment to the single-payer system (which in the past he has admitted he prefers) in order to pass the Affordable Care Act, Mr. Obama is a patient ideologue. He is willing to take what he can get now in order to continue his transformational project for America. Part of that transformational project is going after “the rich.” It has become, for him, something of an obsession.

The president may win this particular battle. But if he does, his compulsion won’t end. For ideologues, for the Captain Ahabs of the world, it never really does.

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Obama’s Tax Policy Aims for the Rich but Hits the Poor

Although the Occupy Wall Street protest movement often shunned both organization and the formation of a coherent set of principles and demands, its antipathy to Wall Street–hence the name of the movement–was central to its cause and its grievances, real or imagined. Punishing Wall Street was a given to the protesters, because in their minds the city’s kings of finance were greedy oligarchs hoarding their wealth. But occasionally the OWS protesters accidentally stumbled upon some cold hard facts that undercut their complaints, such as when New York City Councilman Daniel Halloran approached the crowd and told them:

I think there needs to be Wall Street reform, but we also have to remember that one-third of the city’s revenue comes from Wall Street right now, OK? One-third of the city’s revenue stream already comes from Wall Street.

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Although the Occupy Wall Street protest movement often shunned both organization and the formation of a coherent set of principles and demands, its antipathy to Wall Street–hence the name of the movement–was central to its cause and its grievances, real or imagined. Punishing Wall Street was a given to the protesters, because in their minds the city’s kings of finance were greedy oligarchs hoarding their wealth. But occasionally the OWS protesters accidentally stumbled upon some cold hard facts that undercut their complaints, such as when New York City Councilman Daniel Halloran approached the crowd and told them:

I think there needs to be Wall Street reform, but we also have to remember that one-third of the city’s revenue comes from Wall Street right now, OK? One-third of the city’s revenue stream already comes from Wall Street.

Halloran’s tone was patient, but he stressed the word already, as if to say: How much more of other people’s money do you want to take (a dangerous question when asked to liberals) and what do you think will happen to the poor if we punish the wealth creators on Wall Street who are already funding a third of the city’s revenue stream? That question was implied, not asked; but Joel Kotkin more or less asks and answers it over at Forbes:

With their enthusiastic backing of President Obama and the Democratic Party on Election Day, the bluest parts of America may have embraced a program utterly at odds with their economic self-interest. The almost uniform support of blue states’ congressional representatives for the administration’s campaign for tax “fairness” represents a kind of bizarre economic suicide pact.

Any move to raise taxes on the rich — defined as households making over $250,000 annually — strikes directly at the economies of these states, which depend heavily on the earnings of high-income professionals, entrepreneurs and technical workers. In fact, when you examine which states, and metropolitan areas, have the highest concentrations of such people, it turns out they are overwhelmingly located in the bluest states and regions.

As Thomas Frank might say, What’s the matter with Connecticut (or Maryland, or New York, or California, etc.)? But there’s actually a larger problem here than liberal voters voting against their self-interest. As Kotkin shows, he’s clearly anticipated the “fairness” argument, and demonstrates that the result of Obama’s policy could very well be more inequality, less socioeconomic mobility, and sustained levels of unemployment:

What would a big tax increase on the “rich” mean to the poor and working classes in these areas? To be sure, they may gain via taxpayer-funded transfer payments, but it’s doubtful that higher taxes will make their prospects for escaping poverty much brighter. For the most part, the economies of the key blue regions are very dependent on the earnings of the mass affluent class, and their spending is critical to overall growth. Singling out the affluent may also reduce the discretionary spending that drives employment in the personal services sector, retail and in such key fields as construction.

This prospect is troubling since many of these areas are already among the most unequal in America. In the expensive blue areas, the lower-income middle class population that would benefit from the Administration’s plan of keeping the Bush rates for them is proportionally smaller, although the numbers of the poor, who already pay little or nothing in income taxes, generally greater. Indeed, according to a recent Census analysis, the two places with the highest proportions of poor people are Washington, D.C., and California. By far the highest level of inequality among the country’s 25 most populous counties is in Manhattan.

Kotkin also mentions that, by the way, the tax policy probably wouldn’t help the fiscal condition of these blue states either. But looking at California, it’s hard to argue there’s much desire on the part of Democratic policymakers there to do anything other than revel in the wreckage of their failing state and hope for a federal bailout of some sort.

Should it bother liberals that their national tax policy reflects the logic of the youthful pseudoanarchist flash in the pan that left garbage, and only garbage, in its wake? I suppose it should. By the looks of this “fiscal cliff” debate, it doesn’t.

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