LAST WEEK, Larry King asked George W. Bush a question that, more often than not, discombobulates tax cutters. Do the top one percent of income earners really need tax relief? According to Al Gore, Bush “could pay for every other program” if he eliminated the cut for the wealthiest Americans in his tax plan, said King. The Texas governor gulped and changed the subject to Gore’s limiting tax cuts to “the right people.” But King persisted. “I think everybody should get tax relief,” Bush finally answered. “The federal government should take no more than a third of anybody’s check.”
Bush’s willingness to defend tax cuts for the rich signifies the tax issue is back. The conventional wisdom, of course, is that the American people are doing so well they no longer yearn for lower taxes. That’s only partly true. Voters aren’t demanding a humongous cut like the one passed by Republicans in congress last year and vetoed by Clinton. Nor are they lining up behind the large Bush cut. But voters do want fairness, and there are particular taxes they loathe.
So Bush has adjusted his case accordingly, doing what Bush strategist Karl Rove calls “breaking [their tax plan] down and humanizing it.” Since Labor Day, he’s emphasized several principles of taxation. The argument that the bigger the tax cut, the better, is not one of them. Bush’s first principle is that taxes are too high. “I believe the surplus exists because hardworking people are overtaxed,” he says in his stump speech. Second, tax cuts won’t break the bank. Only a quarter of the $ 4 trillion-plus surplus, Bush notes, would go for tax reductions if he’s elected. Third, every taxpayer should get a cut. “I don’t believe in so-called targeting of tax cuts,” Bush says. Under Gore’s tax scheme, 50 million taxpayers would get no cut at all, Bush insists. Fourth, people — not the government — should decide how to spend their tax cuts. This is a further argument against Gore-style targeting.
The fifth principle is the boldest: a cap on federal income taxes of one-third of everyone’s income, even the richest of the rich. This has resonance, a Bush aide says, “because the average voter doesn’t have an understanding of what the top rate is.” Now, Bush explains in his standard speech, it’s 39.6 percent, and he’d cut it to 33 percent. Sixth, the tax code should uphold the family. Bush proposes to eliminate the marriage penalty and inheritance tax, while boosting the child tax credit to $ 1,000 from $ 500.
Bush aides claim his tax themes are not solely the result of careful polling. But he is hardly flying blind. All his ideas have been tested in public polls, private surveys, or focus groups. “My friends the pundits say polls show the American people don’t want tax relief,” Bush told a factory crowd in Cleveland on September 21. Indeed, there are such polls. But they don’t explore the tax issue deeply enough, which the Bush campaign has. For instance, Rove likes to tell conservatives that voters by a two-to-one margin feel Gore’s proposals to expand government are a greater threat to prosperity than Bush’s tax cuts.
Bush also tries to score points from appearances with carefully selected families. In Cleveland, he declared the middle-income family at his side would save $ 2,227. This might seem like an appeal to greed. Nope, a Bush aide says, it merely shows that “regular people get tax cuts.” It humanizes the issue.
Congressional Republicans have found a different way to use the tax issue: as a pox on Democrats. Democratic incumbents in the House have countered this by voting for GOP measures to kill the marriage penalty and death tax. Still, Republicans are eager to exploit the tax issue. “The national media was writing off taxes as an issue, but we disagree,” says Jim Wilkinson of the House Republican campaign committee. His boss, representative Tom Davis of Virginia, says: “If these things don’t have any salience, how come so many Democrats are voting for the cuts?”
In September, Republicans aired a series of tough anti-tax TV ads against non-incumbent Democrats. In an open seat outside Pittsburgh, the Democratic candidate, state representative Terry Van Horne, has been pilloried for voting to increase taxes on everything from gasoline and magazines to pizza. The ad ends: “Where’s he from? Pennsylvania . . . or Taxes?” In an open seat in Orlando, Democrat Linda Chapin is attacked for voting as a county commissioner to boost taxes on gas, telephone service, water, heat, and electricity. In a West Virginia open seat, Democratic state representative Jim Humphreys is blamed for hiking taxes on doctors’ visits.
The test of Bush’s tax appeal and all these ads won’t come until November 7. An Investor’s Business Daily survey of the heralded “investor class” finds they are less interested in tax cuts, even for capital gains, than the general public. Maybe they’ve made too much in the market. Rove, for one, has estimated that 75 percent of the electorate is invested in stocks, either as individual investors or through mutual funds or retirement plans. To win, then, Bush may have to raise their consciousness on taxes. Not a job for the faint-hearted.
Fred Barnes is executive editor of THE WEEKLY STANDARD.
