(Cross-posted from Think it Through.)
Did you hear the joke about the president who wants to reduce the deficit and cut taxes? Depending on your level of cynicism, you are either amused or annoyed that our lawmakers in Washington simultaneously pay homage to special commissions on the federal budget deficit and debate the size of the tax cuts they will enact.
But you cannot place all the blame on our politicians.
Ever since Ronald Reagan made tax cuts the engine of his drive for smaller government, the American voters have acted like spoiled children holding out their hands for more candy even when Halloween is long past. The tea party members have built an entire political movement based on such childish selfishness.
Before Ronald Reagan, Americans seemed to understand the income tax was a necessary price to pay for the functions of government that benefit society as a whole and each of us as individuals. This may be why, prior to Ronald Reagan, no candidate had run for president on a platform of cutting taxes.
It is true that President Kennedy, once in office, decided to try a Keynesian approach to stimulate a sluggish economy by lowering taxes and increasing government spending temporarily, but he did not campaign on tax cuts.
In the last century, Americans managed to build a strong economy and a broad middle class with top tax rates ranging from 70 to 90% of income. By the time Reagan left office in 1988, he had cut the top tax rate to 28%.
The lost income for the government, mixed with Reagan’s huge military build-up, left the country deeply in debt. Nonetheless, Reagan’s legacy has been that Americans feel entitled to tax cuts and, ever since, political candidates of both parties have made sure some type of tax cut played prominently in their campaigns.
George H.W. Bush and Bill Clinton both campaigned on tax cuts – Bush promised a cut in the capital gains tax and Clinton called for reduced taxes for middle- and low-income workers. Once in office, however, both of these presidents raised rates on upper-income households in order to recover from the deficit-spending Reagan years. Clinton’s tax and budget policies gave the country eight years of economic prosperity, and he handed his successor a budget surplus.
George W. Bush reverted to the Reagan lesson. He promised and delivered a massive tax cut with virtually no rationale other than “It’s your money, I want to give it back to you.” Democrats in Congress were not willing to buck the Reagan legacy, so they essentially went along.
Even Barack Obama, the self-described agent of change, followed suit and ran for president on a platform of a middle class tax cut. Now he is shadow-boxing with himself about how many of the Bush tax cuts installed in 1981 he wants to let stand.
The Pew Research Center reported this year that a majority of nearly six in ten voters would choose to either repeal all of the tax cuts (31%) or just repeal the tax cuts for the wealthy (27%), while only one in three (30%) wanted to keep all of the tax cuts.
In extensive research on taxes over the years, we have found that when people are informed of things such as the budget deficit, the national debt, and the billions of dollars the government spends every month simply to pay the interest on the national debt, tax cuts are placed on a much lower priority.
Yet, President Obama has not explained the choices between tax cuts and what else can be done with the money. He, like most other politicians, has accepted as truth that you cannot oppose all tax cuts.
Why not inform people of the payoffs – for jobs, for the economy, for programs they care about – if we repeal all of the Bush tax cuts? You can make a compelling case that the benefits to repeal are far greater than those of letting the tax cuts continue.
Is there no public official with the skill and courage to help the country break its adolescent dependency on tax cuts?
John Russonello is a partner with Belden Russonello & Stewart: Public Opinion Research and Strategic Communications in Washington, DC. He writes the blog Think it Through.