Why Republicans have an edge in tax-cut politics
As the Senate debates tax cut, Democrats are wedged between giving in - and getting stuck.
WASHINGTON — With the discipline that he showed in the 2000 presidential campaign, George W. Bush has been barnstorming the country this week in an effort to squeeze the biggest tax cut he can out of Congress.
His message is relentless: Cut federal taxes - including the top individual rate and taxes on dividends - and a million new jobs will be created by the end of 2004. "Sure, we're in deficit," President Bush acknowledges, but "we'll deal with [it]." Over and over, he declares his optimism about the economy.
On the face of it, polls shows that Bush's message isn't a big winner with the American people. While the president's overall job approval rating remains high - 64 percent, in the latest Christian Science Monitor/TIPP poll - his tax-cut plan still wins less than 50 percent support in a variety of polls. Given a choice between the second major tax cut in two years and domestic spending priorities, the public overwhelmingly chooses the latter. In the latest Washington Post-ABC poll, tax cuts ranked 10th in importance.
But the Democrats appear to be trapped. If they oppose tax cuts - or try to prevent temporary cuts from becoming permanent - the Republicans can haul out the old "tax and spend Democrat" bumper stickers. The Democrats' major presidential candidates appear stymied on the issue.
"The Republicans believe they've boxed the Democrats into a corner, because in order to reverse the tax cut or limit it, that automatically translates into language that makes the Democrats appear to have raised taxes," says independent pollster John Zogby.
Bush seems to have dampened the Democrats' "fairness" argument - that the proposed tax cuts skew toward the wealthy - by charging the Democrats with engaging in "class warfare." Demo-crats don't like that charge, party supporters say privately, especially as they head into campaign-fundraising season, when wealthy donors become especially crucial.
"The overall strategic goal of the Roves and other strategists is to deprive the Democratic Party of resources for its agenda," says a senior Republican Senate aide, referring to presidential adviser Karl Rove. "They view it as the starving-the-beast strategy. Their view is that no one ever lost an election for calling for less taxes." But, the aide says, if by next year there's still a stagnant economy, "the issue won't work."
This year's tax-cut strategy is said to be part of a larger White House plan to propose tax cuts every year Bush is in office. Following a major cut in 2001 of $1.3 trillion over 10 years, and a much smaller tax break on investments last year, a cut this year of even $350 billion over 10 years would still represent the third largest tax cut in history.
Paul Weyrich, head of the conservative Free Congress Foundation, says he has heard the annual tax-cut idea from "any number of rather high officials" in the White House. "I've never heard Karl [Rove] himself say it, but I've heard others who are higher-up enough in the chain [say it] that I would take it seriously," Mr. Weyrich says.
While there's no known debate on this issue within the White House, some outside allies like Weyrich question whether annual tax cuts are the best use of the president's political capital - which, following the successful removal of the Iraqi regime, may never be higher.
"I'm all for tax cuts, and I would like to see as many as possible, but when you are going to offer them every year, you'll have to expend an awful lot of capital to get anything done - especially with a Senate that is disinclined toward tax cuts," says Weyrich. He would prefer for Bush to use his capital to push for confirmation of judicial nominees, because they're lifetime appointees - and cannot be overturned by Congress, as tax cuts can.
Deal Hudson, editor of Crisis magazine and another Bush ally from the Christian right, believes the president can do more than one thing at a time. But, he adds, the question is "pertinent, because there's only so much energy and capital an administration can spend." Still, he says he's seen no interruption in the emphasis on issues such as cloning, partial-birth abortion, and fetal rights.
As time marches on, Bush may lose traction on the tax issue. According to the latest Monitor/TIPP poll, taken May 5 through 9, 2003, 47 percent of Americans said they pay too much federal income tax - the latest in a steady decline for that figure. In April 2002, the figure was 52 percent. In August 2001, it was 59 percent. And in October 2000, it was 65 percent.
All of the Democratic presidential candidates say the 2001 tax cut has hurt the economy. But they propose different solutions. Sens. John Kerry of Massachusetts, Bob Graham of Florida, John Edwards of North Carolina, and Joseph Lieberman of Connecticut would let the rate cuts of 2001 hold, but prevent some future cuts from kicking in.
If Bush gets his way, those later cuts would be accelerated to take effect this year. So the trap would be set: Any Democrat who would still want to erase those tax cuts would face charges of raising taxes.