Has The Tax Platform Seen Its Day?

Is the tax plank on the Republican platform still a viable issue to run on? In Ari’s article I posted on yesterday, I think he makes a good point when he makes a distinction between the Republican and Democratic tax ideology and platform.

“If Republicans, including their presidential candidates, wonder why their calls for tax relief don’t resonate like they used to, it’s because there aren’t that many income taxpayers left. They’ve been taken off the rolls.

“As for the Democrats, they historically have raised taxes and redistributed income as a core philosophy. It doesn’t matter to them how much money some people pay — the argument is that the wealthy can always pay more. According to this point of view, it’s immaterial that the tax code is highly progressive; it can always be made more progressive. While raising taxes on the few to benefit the many might be a political winner, it’s an increasingly risky policy to pursue.”

The tax platform is genius both as a campaign issue – cutting taxes puts more money in the pockets of workers – and a means to economic growth – cutting taxes encourages those that can to invest in new and growing businesses, creating more jobs.

But 60 percent of voters cannot relate to what Republican candidates say when they advocate for fewer taxes. Sixty percent of voters are not affected by taxes and do not understand what they can gain from fewer taxes.

One value is money out of pocket. If 60 percent of voters never have money taken from their paychecks (of course, they pay sales taxes, registration fees, etc.), they never see an increase in their bottom line when taxes are reduced and so have no incentive to favor fewer taxes.

Another value is increased economic opportunity. Raising taxes reduces available jobs because investors have less to invest in new businesses, but workers have a difficult time realizing how this affects them. Workers can’t see jobs they never had. They can see the increased government aid they receive from the tax increase, but they can’t see the great job they could have had that the tax killed.

So forty percent of voters pay all the taxes. This is a minority. When Republicans pull out the tax card, only 40 of 100 people listening understand. No party can win an election with 40 percent of voters. The tax platform may have seen its day.

Will the inequality right itself? No. Ari writes: “If, as now happens, 60% of the people in our democracy can force 40% to pay the bills, what’s to stop 65% from making 35% pay it all? Since no one wants to pay taxes, what’s to stop 90% of people in a democracy from making 10% pay it all? Or why not let 99% of the country off the hook, as long as the remaining 1% picks up the tab?”

While the tax platform should not be dropped (lowering taxes is a foundational element of a healthy economy) it may be time to start finding another mainstay.

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