Can Republicans escape the tax trap?

James Poulos Daily Caller Columnist
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So far, against every temptation, the GOP has resisted mounting pressure from Congress, the White House, and their powerful media allies, all of whom are intent on raising taxes. The super-sized failure of the super committee might undo all that. Without a grip on their first principles, Republicans could lose much more than a tax fight or two.

Unable to blame a Koch, the left has turned its guns on a dime and trained its fire on Grover Norquist, that handy human embodiment of establishmentarian anti-tax orthodoxy. “Republicans chose to keep their pledge to Grover Norquist,” Nancy Pelosi raged, “to protect the wealthiest one percent at all costs.”

Hype like that would defeat itself in a normal world, but ours is a time far removed from the one that saw the GOP slash rates for all Americans during the Bush era. For years, Republican tax orthodoxy thrived in a climate of wild spending and swelling deficits. Now, with sympathy for the Occupy movement holding strong despite its many detours into violence and squalor, the orthodox approach has reached its shelf life.

It’s far from clear, however, where the GOP has to go. The match-up between rhetoric and policy that once served the party so well has set a political trap dangerous enough to keep the White House in Barack Obama’s hands and doom congressional Republicans to the most abysmal of approval ratings.

It’s a trap that leads Republicans off message as the party of (relative) fiscal responsibility. Conservatives, including current presidential candidates, are decrying the huge number of Americans — some 47% — who pay no federal income taxes. No surprise, they lament, that voters who contribute so little would vote for the party that gives them what others produce! But as Keith Hennessey and Ramesh Ponnuru have explained, the dramatic increase in the number of supposed “freeloaders” (they pay other important taxes) is the fault — if we’re now calling it that — of Republicans, who pushed for the per-child tax credit under Clinton and expanded it under Bush.

Critiquing the 47%, of course, comes off as a clumsy way to shift the spotlight off of the so-called “wealthiest Americans.” Wherever you draw the line, whoever’s on the richer side is, by definition, the wealthiest. Democrats have crudely and deliberately drawn it so as to tar, say, a family of five with two low-six-figure earners with the same brush of luxury and privilege as Warren Buffett.

But Republicans have let themselves seem to argue that fiscal responsibility is doomed unless we ensure that Warren Buffett himself doesn’t pay more taxes. So John Kerry is able to sigh that the super committee “could not overcome the Republican insistence on making tax cuts for the wealthiest Americans permanent.”

To top it off, Republicans now appear to believe that the middle class will collapse if it isn’t propped up with government subsidies, taking the moral fabric of America down with it. Tax cuts, it turns out, aren’t even enough. Once we’re in the territory of tax credits, however, we’re off to the fiscal irresponsibility races, with both parties using the tax code not as a way to raise revenue for the basic functions of government (however defined!) but as a way of social sculpting and behavioral manipulation.

Of course, what Republicans really want to say is that raising taxes on anyone, especially right now, is just a popular way to avoid having to make the kinds of dramatic cuts necessary to begin the hard work of restoring balance to the budget at some point in the next hundred years. In reality, Republicans know, the Democrats want to raise taxes on those who can most afford it to satisfy their deeply held urge to make a self-conscious show of officially shared sacrifice.

The liberal-progressive case for tax hikes is not, at root, economic. It’s moral. Since politics, for the left, is all about minimizing human suffering, liberals and progressives set a trap for Republicans by asking in tough times not for shared suffering but for shared money.

Nobody should have to surrender more of their wealth to the government as a penalty for being too well-off to hurt as much as others. But the manifest failure of liberal governance to create wealth and reverse recessions drives frustrated Americans already suspicious of technocratic management to support punitive taxation over macroeconomic policy of any kind.

The hard fact for the GOP is that it is popular to take more money from richer Americans for no reason more sophisticated than that they’re richer.

Why? When Republicans turn against their own cuts for the bottom brackets, dig in their heels for the upper brackets, and indulge in hypocrisy to subsidize the middle brackets out of fear for the secret weakness of Real America, whatever clarity and focus their fiscal-responsibility brand once had is lost — and the straightforward liberal creed of redistributionism takes its place in the public imagination.

How to escape such a trap? As some tea party politicos have indicated, a full overhaul of the tax code — destroying its use as a tool of social engineering — could produce a significant marginal increase in revenues consistent with a liberty agenda. But that herculean labor would take time. In an atmosphere of perpetual crisis and ginned-up moral outrage over “income inequality,” Congress is rendered incapable of such important work.

Worse, pulling out the feeding tubes of credits and subsidies is a painful process that cannot be done in a hurry without doing the economy — and people — damage. Old-fashioned conservative prudence cautions strongly against drastic changes to our perverse tax system — with or without steep budget cuts.

The way out of the tax trap ultimately involves a big reconfiguration of the GOP brand. Fiscal responsibility is good, but in politics — as opposed to business — it’s not an end in itself. In politics, the purpose of fiscal responsibility is to help prevent government from paying itself to grow in size and power. That might not be an easy sell in an era when many people actually want to pay for the security promised by servitude. But it’s far more compelling a message than what the GOP is offering now.

James Poulos is a columnist at The Daily Caller, a contributor at Ricochet, and a commentator in print, online, and on television and radio. Recently he has been the host of The Bottom Line and Reform School on PJTV and a fellow of the Claremont Institute. His website is jamespoulos.com and his Twitter handle is @jamespoulos.