Democrats Spoil GOP Strategy

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What, do the GOP presidential candidates think that Democrats are going to make it easy on them? In a nonbinding vote, the Democratic-controlled House voted this week in favor of some of the Bush tax cuts–such as the 10 percent tax bracket, marriage penalty relief, and child tax credits–so that they don't expire at the end of 2010 as they are now scheduled to do. Other tax cuts, such as the 2003 investment tax cuts (capital gains and dividends) and the 2001 cuts in marginal tax rates, are still on the chopping block.

In other words, the Dems are latching on to the most populist, politically easiest-to-defend tax cuts and then advocating higher taxes for wealthier Americans to pay for new spending programs. Expect more or less the same strategy from the Democratic presidential candidates.

Here's why: In the recent GOP presidential debate, the various candidates talked as if Democrats were in favor of eliminating all the Bush tax cuts, a $2 trillion tax increase starting in 2011. That sure would be convenient for the Republicans. Maybe they're also counting on some of their Dem rivals to advocate opening direct talks with al Qaeda as well, or legalizing hard drugs.

But Hillary Clinton, Barack Obama, John Edwards, and the rest are not going to play the game like saps. Just as Bill Clinton did, they are cleverly going to take the juiciest parts of the GOP tax agenda and run with them. That will leave Republicans the tougher job of defending the other tax cuts–the ones that seem to favor the rich–rather than eliminating them and spending the money on education or healthcare or whatever the Dems are proposing.

If they want to win in 2008, Republicans seemingly have to offer some economic strategy other than just saying, "I will extend the Bush tax cuts," because Democrats will be in favor of extending some of them as well.

So how will the GOP appeal to middle-class voters? Although John McCain might think his get-tough-on-spending talk will do the trick, Perot-style economics probably won't be so compelling when the federal budget is near balance, as it may well be next year. Yet all this could be a blessing in disguise for the Republicans, by nudging them to articulate a broader, more expansive economic platform, one embracing wholesale change to the tax system to make it more pro-economic growth, pro-productivity, and pro-innovation.


TAGS:
taxes
2008 presidential election
Democratic Party

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