GOP must grow up on taxes

Dr. Mark W. Hendrickson's picture

[Editor’s note: A version of this article first appeared at Forbes.com.]

Republicans are flailing about these days, trying to rebrand themselves before the next election cycle. A certain amount of introspection and internecine debate is inevitable after suffering a stinging loss against an opponent with a dismal record.

One thing the GOP needs to do to gain greater acceptance among voters is to improve their credibility by outgrowing a tiresome, unthinking opposition to any and all tax increases.

This is anything but a recommendation that Republicans “go moderate” and tack for the political center. Being to the right of 99.9 percent of Republicans on taxation, I agree that Americans are overtaxed and for decades have favored zero capital gains tax; advocated zero taxes on corporate profits; and called for a low, flat, income tax.

What bugs me now, and what should concern Republicans who worry about their image, are the recent objections raised by some Republican legislators in Michigan and Maryland to their respective governors’ proposals for higher gasoline taxes to pay for road and bridge repairs. In a fairly typical comment, Maryland state delegate Susan Krebs complained that motorists would bear the cost of the tax hike.

But why shouldn’t motorists — the users of roads — be the ones to pay for the repair and upkeep of those roads?

For Republicans to take the position that someone other than motorists should subsidize road maintenance is to adopt the ethos of progressives — that people should consume the economic goods they want and then stick somebody else with the tab.

There is a different, honest, and straightforward approach that Republicans can take if they believe that motorists should not have to pay as much as their governors propose for road maintenance: They could privatize the roads and let the new owners worry about how to cover the considerable costs of providing such a valuable product to drivers.

Republicans did similar damage to their reputation with their reflexively anti-tax ideology in 2010 by assenting to Obama’s 2 percent FICA (Social Security) payroll tax reduction.

The GOP may talk a lot about “saving Social Security” for future generations, but they made hypocrites of themselves by voting to reduce Social Security revenues at the very time when current revenues no longer matched payouts, and they themselves were warning about the dangers of Social Security’s long-term underfunding.

As with road repair, if Republicans believe that government should be involved in its citizens’ retirement, they should authorize the collection of sufficient revenue to pay for the commitments they legislate.

Alternatively, if they rebel at covering the expenses of a particular program, they should privatize it.

In the case of Social Security, privatization would not be the sham privatization proposed by George W. Bush — i.e., diverting part of Social Security withholdings into government-approved private investments.

A genuine privatization would deposit payroll deductions directly into an account in the employee’s name where the federal government can’t control or spend it.

In both the recent opposition to raising taxes to pay for upcoming road repairs and in the two years of Social Security tax cuts, Republicans have made a mockery of their professed concern about fiscal responsibility and government deficits.

Reducing the revenues for specific spending projects and programs without reducing the corresponding spending is a formula for increasing deficits.

Too often, Republicans pick the low-hanging political fruit of tax reductions without doing the hard — and more important — work of reducing government spending. The result is that Republicans end up weakening their brand.

Democrats have an advantage. They know who they are. They are single-minded in their relentless, unapologetic desire to maximize government spending.

They don’t give a hoot about deficits. They know that the more they spend, the more power and control they have.

As repugnant as this mindset is to those of us who value liberty, this unwavering commitment to the ever-increasing bestowal of federal largess motivates a large number of voters to go to the polls and vote Democratic.

Republicans, by contrast, project ambivalence and insincerity. They claim to be more fiscally responsible, but show a willingness to support underfunded expenditures.

They claim to believe in limited government, and then do their best to make the Democrats’ welfare/transfer state work, rather than proposing to dismantle it.

The result is cognitive dissonance. How can voters be sure about what Republicans really believe, other than the importance of winning elections?

My recommendation to Republicans: Work harder to differentiate yourself from progressives and Democrats by forging a clear, unambiguous brand as the party of smaller government.

If you remain the party of Big Government Lite, work less at reducing too-high government spending than at reducing too-high taxes, and are unwilling to devolve government programs to the private sector — in other words, if you persist in business as usual — you will deserve the electoral defeats you will bring upon yourselves.

[Dr. Mark W. Hendrickson is an adjunct faculty member, economist, and fellow for economic and social policy with The Center for Vision & Values (www.VisionAndValues.org) at Grove City (Penn.) College.] © 2013 by The Center for Vision & Values at Grove City College.

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