Republicans Need A Modified Tax Message

This perhaps demonstrates just how big a mountain the Republicans have to climb with their deficit reduction budget:

While I give Ryan and his compatriots high marks for sparking the current debate, I felt from the beginning that they missed the boat on a couple of things. One is an unrealistic assumption about the eventual size of the government. Ryan wants to see it end up somewhere around 14% of GDP. That is to my mind unrealistic for a modern economy, and particularly so for one which wants a robust defense capability. The other was their approach to taxes.

I don’t buy the tax the rich and all our troubles will go away argument. Others have ably demonstrated that there just isn’t enough money there to get the job done. But the video pretty clearly demonstrates that the voters buy into the illogic. Ryan and company might have been striving for ideological purity but that’s a virtue in a nunnery, not in politics.

If the Republican’s have any hope of countering the President’s demagoguery on the subject they have to move towards a Simpson-Bowles approach to taxation. Close the tax expenditure provisions, lower rates and broaden the base. That would enable them to credibly claim that their program does indeed take more from upper income earners and provide the basis for an honest discussion on the reality of higher tax payments from all income levels.

Absent spending cuts that are not politically viable that’s where any honest negotiation will end up. Getting out in front on the debate would enable them to expose the fraud the Democrats propose. I don’t think that the public is so naive that they believe a sane budget can be had via spending cuts alone. Nor do I think that they don’t know intuitively that higher taxes across the board are required.

Telling someone that the amount of money they send to the government is going to increase is not pleasant nor generally a good way to win elections in normal times. I think that Americans and particularly the independent voter are aware that these aren’t normal times, that the road we’ve been following leads to an unacceptable destination. The Republicans swept away Democrats last Fall with some pretty unconventional ideas. Their current budget plan takes on a lot of sacred cows, so they might as well take the last step and level with the public about the reality of tax revenues. It’s just possible that the reaction might surprise them.

About Tom Lindmark 401 Articles

I’m not sure that credentials mean much when it comes to writing about things but people seem to want to see them, so briefly here are mine. I have an undergraduate degree in economics from an undistinguished Midwestern university and masters in international business from an equally undistinguished Southwestern University. I spent a number of years working for large banks lending to lots of different industries. For the past few years, I’ve been engaged in real estate finance – primarily for commercial projects. Like a lot of other finance guys, I’m looking for a job at this point in time.

Given all of that, I suggest that you take what I write with the appropriate grain of salt. I try and figure out what’s behind the news but suspect that I’m often delusional. Nevertheless, I keep throwing things out there and occasionally it sticks. I do read the comments that readers leave and to the extent I can reply to them. I also reply to all emails so feel free to contact me if you want to discuss something at more length. Oh, I also have a very thick skin, so if you disagree feel free to say so.

Enjoy what I write and let me know when I’m off base – I probably won’t agree with you but don’t be shy.

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