In light of the conclusion of the Senate trial of the president, the editors of THE WEEKLY STANDARD asked 22 writers, thinkers, and political actors the following questions: “President William Jefferson Clinton has been impeached and acquitted. What have we learned? What should we do now?”
BILL CLINTON IS SECURE in the White House, Congress is taking a break, and the Republicans, after a noble but failed effort to prove that no man is above the law, are wondering what to do now that the need for policy-making is upon them.
Unfortunately, they are not very good at coming up with programs that are both sensible and appealing, and are quick to attack any of their number who suggests that compassionate conservatism might just be a tiny bit more attractive to most people than the cold-hearted variant.
About the best they can come up with is an across-the-board tax cut, with added relief for high earners in the form of lower capital gains and inheritance taxes. Since the highest earners pay the highest taxes, the 10 percent tax cut that Republicans favor will return to the rich — a respectable word, properly used — far more dollars than it will to middle class or poor families. Wall Street investment bankers and Hollywood movie stars will smile all the way to the bank — and probably contribute a goodly portion of the funds forced upon them by Republican tax-cutters to Al Gore and other Democratic candidates.
Middle class families, meanwhile, will find themselves with so few extra dollars in their paychecks that they won’t notice them, and without the goodies Clinton has dangled before them by way of subsidies to “carers” and other new programs. Bad politics.
Worse still, bad economics. A dollar added to the take-home pay of a high earner is worth less to him than a dollar added to the pay of a low earner, just as a fifth pancake is worth less to a dinner than the first one (to use an example from elementary economics classes). An investment banker is not likely to work harder if his taxes are cut by 10 percent, or at least is less likely to do so than some low earner who finds a meaningful increase in his pay packet.
Which leads to one conclusion: The Republicans should push for tax relief for low earners — cut as many taxpayers from the rolls as available funds permit. Such a move may not persuade many low-income voters to abandon their loyalty to the Democratic party, but it will show the vast middle class that the Republicans are no hard-hearted, apologists for the rich.
Better still, a tax cut targeted on low earners will force Clinton to defend his proposed new spending as being more compassionate than giving low earners more money to use as they see fit. And it will increase the gap between the pay-check and the welfare check.
If this be compassion, make the most of it. It certainly makes economic sense.
Contributing editor Irwin M. Stelzer is the director of regulatory studies for the Hudson Institute.
