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Answering Charles Murray on Taxes

Charles Murray had a different reaction than I did to the fact that at last week’s debate all of the GOP candidates said they would refuse to accept a “real spending cuts deal” that offered $10 in cuts for every $1 in increased taxes. “If taxes cannot be raised under any circumstances,” I wrote, “then we have veered from economic policy to religious catechism.”

Charles, on the other hand, was annoyed that none of the eight challenged the false premise of the question. “There is no such thing as a real spending cuts deal,” he writes. “Experience indicates that lawmakers do not yet know how to craft legislative language that irrevocably binds Congress to its fiscal promises. That’s why all eight candidates could properly refuse to support a 10:1 spending cuts deal, or even a 100:1 spending cuts deal. They are not deals that would be honored.”

Set aside the fact that some deals between Republicans and Democrats, like the 1997 budget agreement, helped to rein in federal spending and led to a balanced budget (see Keith Hennessey’s excellent analysis here). I do agree with Charles to this extent: It would have been fine for any of the eight candidates to challenge the premise of the question. As Murray points out, there are certainly grounds to have done so. But what made the question by Byron York and Bret Baier interesting is that it was (to use a device Charles is very familiar with) a “thought experiment” – a mental exercise that accepts a hypothesis or premise in order to clarify a philosophical point of view. If one wants to reject the premise, okay; no conservative would accept real tax increases for imaginary cuts.

But the reason I thought the question posed by York and Baier was illuminating is because there are some within the GOP and conservative movement who believe that taxes should not be raised under any conditions, any time, for any reason. And so someone like Mitch Daniels, whom both Charles and I believe to be among the finest and most fiscally conservative governors in generations, was criticized by some on the right for having agreed to increase the Indiana sales tax by one percentage point and by proposing a budget that sought to close a $600 million budget gap by increasing taxes on high-income Hoosiers. For this Daniels was accused by some of “betraying” taxpayers with his budget proposal. He was considered an apostate.

The attacks on Daniels — who has cited two of Murray’s books as key in shaping his governing philosophy – were unfair and unwarranted. Under Daniels, Indiana property taxes were cut 30 percent. For the first time, Standard & Poor’s raised the state’s credit rating to AAA. He transformed a $200 million budget deficit into a $1.3 billion surplus. Indiana also has its fewest state employees since 1978, the nation’s lowest state-government employment per capita, the lowest effective property taxes and the third-lowest per capita spending. No matter; for some, what Daniels did was unforgivable.

For the record, I believe we should lower the current tax rates. I was against a debt ceiling deal that raised taxes. As a society I believe we’re overspending, not under-taxing. And I have warned that Democrats in Washington will attempt to lay traps for Republicans by offering mythical spending cuts in exchange for real tax increases.

With all that said, though, I do think that there is a cast of mind among some people in the GOP that would turn an admirable public figure like Mitch Daniels into a Republican pariah simply because, in the course of his governing career, he raised taxes, even while lowering others, even while cutting the size of the state government, and even while offering far-reaching reforms in education and health care. And to repeat what I argued before: if we have reached a point where Republicans running for president cannot envision (or at least admit to) any scenario in which they would raise taxes, even if as a result they could roll back the modern welfare state, then it’s time to consider loosening the philosophical straightjacket they are in.

My good friend Charles is of course free to reject the premise of the question asked of the eight GOP candidates last week. But given that he’s one of the best minds within the conservative movement (to say nothing of prescient regarding Tiger Woods), I’d be interested in what Charles has to say about a “thought experiment” in which we would see spending cuts that were 10 times, or 100 times, larger than every dollar in increased taxes. I suspect he would be right where I am. Beyond that, what does Charles think of the record and governing philosophy of Governor Daniels, who has said, “At some stage there could well be a tax increase. They say we can’t have grown-up conversations anymore. I think we can.”?

I think we can, too.

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