New York’s Nixons

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

The New York Sun

It’s been a long time since George Herbert Walker Bush was president, and a longer time still since Richard Nixon was in the White House. But the experiences of the two Republican presidents who raised taxes are something for New Yorkers to remember as our own city and state endures massive increases in sales, property, and income taxes.

When Nixon was elected in 1968, the top capital gains tax rate for individuals was 25%. By the time he left office, it had soared to 35%, according to historical data from the American Council for Capital Formation. The economy ended up in two contractions — from December 1969 to November 1970 and then again from November 1973 to March 1975, according to the National Bureau of Economic Research. Nixon made more mistakes in addition to raising taxes. He allowed domestic spending to soar, and he tried wage and price controls. There was also the small matter of Watergate. But the combination of increased marginal tax rates and increased government spending were enough to help lose the White House for Republicans in the 1976 election.

Then there was George Herbert Walker Bush. He broke his “read my lips” pledge in 1990, raising the top marginal income tax cut rate to 31% from 28% and imposing a luxury tax on the purchase of some cars and boats. The economy ended up in a contraction from July 1990 to March 1991, according to the NBER. And in 1992 Mr. Bush ended up losing the presidency to a little-known Democratic governor from Arkansas who was campaigning on a promise of a middle-class tax cut.

We wouldn’t want to overstate this. Tax policy isn’t everything, or even the only thing. But history has shown that it is important in growing the economy and winning elections. What does this mean for Richard Milhous Bloomberg and George Herbert Walker Bruno? Or for George Herbert Walker Pataki, who, for all his laudable rhetorical opposition and vetoes, was too weak a leader to save the city and the state from the tax increases that Senate Majority Leader Joseph Bruno, Mayor Bloomberg, and their Democratic allies wanted?

Well, the voters will have their say in the end. But the other lesson of the experiences with Nixon and George H.W. Bush were that the voters had their say on two levels. At the level of the general election, they threw the Republicans out. But at the level of the Republican Party, the tax-raising Republicans were thrown out by tax-cutting Republicans. After Nixon and Gerald Ford came Ronald Reagan, who cut taxes. After George Herbert Walker Bush came George W. Bush, who cut taxes. All of which serves to confirm our view that the opportunity is ripe in New York for a takeover of the city and state Republican Parties by those who will fight for tax cuts instead of for tax increases. It’s not that there aren’t enough Republicans in office — the Party of Lincoln controls the New York governor’s mansion, the state senate, and the mayoralty. Yet still we are seeing massive tax increases in a city that is already taxed to the hilt. It’s clear who New York’s Nixons are. The question is, where are the Reagans and the George W. Bushes?


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