Can Republicans Be Losing the Tax Debate?

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The New York Sun

Do my eyes deceive me? It seems that the Republicans are in danger of losing the debate on cutting taxes. Some thirty years after President Reagan proved that tax cuts encourage economic growth — which enriches us all — glum figures like President Obama are roaming the land talking about the apolaustic lives of the very rich and the need to take their loot so we can all live better.

Facts are facts: if you expropriated all the wealth from the top one percent you would but dent our national debt, and then where would you get the money for next year and the year after that? Class warfare is not the answer.

Nonetheless Democrats make the charge that the Republicans are defending tax cuts for the wealthy. Bravely stepping forward is Speaker of the House John Boehner and House Majority Leader Eric Cantor to say they are not, or that they oppose tax increases. Every time they leave something out.

In so doing they play into the hands of those who would prolong this economic slowdown. Thus Eugene Robinson in the Washington Post cites a Congressional Budget Office study that found that the income of the top 1% in America grew from 8% to over 17% from 1979 to 2007. And he claims this shows “why the Occupy Wall Street protests have struck such a nerve.”

He did not add that high-income earners suffered vast decline in their percentage of national income from 2007 to 2009. Alan J. Reynolds estimates that they fell to 11.3% and that the losses suffered by the wealthy and by the small businesses was nothing to crow about, increasing, as it did, poverty and unemployment in the nation as a whole.

As for the Occupy Wall Street encampments across the country, I think the American people are catching on as these lawless settlements are disbanded. They are perhaps the greatest concentrations of crime, petty and not so petty, to be found in the country. From public masturbation to rape, from muggings to murders—these encampments had it all, and they have yet to come up with a Mahatma Gandhi or even a Rev. Sharpton. Even the Rev. Jackson is staying away.

So what do the Republicans leave out in their rebuttal to the grim Democrats? They leave out that they have an economic model that is proven. It is called supply-side economics. According to the model one does not raise taxes on anyone, certainly not in times of economic unease. The very rich might be slobs or they might be living saints, but like everyone else their taxes are not to be raised because they spend their money or invest their money in economic growth.

They cannot help themselves. The way they spend or invest is always more efficient than the government. Money spent by the rich (and the middle class) leads to growth. Money spent by the government rarely leads to growth, and the following year the government has to come up with more money again.

Obamacare was sold to a gullible public in part with delusional claims that thousands of healthcare givers would be employed by the largess of the federal government. And who would employ them in the years ahead? If healthcare were paid for by private means the healthcare giver would still be working in the years to come, and they would not be dependent on the government. Government is not a reliable source of funds. Ask a citizen of Greece or of Italy.

There is a way for Republicans win the tax debate. They should say that all Americans know better how to invest and spend their money than the federal government. Then they should say that under Obama the government is munching on up to 25% of the GDP. It should lower its intake back to the traditional 18-20%. No one can afford a government that consumes 25% of GDP.

Mr. Tyrrell’s new book is “After the Hangover: The Conservatives’ Road to Recovery.”

The New York Sun

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