Iraq in continuing meltdown. Oil prices at record highs. Forty-five million uninsured. A still-large budget deficit and an ever-increasing debt. How to respond? Hey, let's cut taxes! That was the congressional rejoinder to our nation's several crises in early May, when lawmakers passed a five-year, $70 billion tax cut, which news accounts affirmed that the President was eager to sign. The story is an old one, but the details still have not lost their ability to shock: Middle-income households will receive an average of $20 back, The Washington Post reported, while the .02 percent of American households above $1 million will reap an average windfall of $42,000. One almost has to admire the Tammany-esque frankness of these numbers. In 2000, candidate Bush at least felt the need to pretend that his tax cuts were aimed at the middle class. But now, with the clock ticking on his (and maybe congressional Republicans') lame-duckery, they don't even bother disguising the class warfare.
With a small number of exceptions -- 15 in the House and three in the Senate -- the Democrats all voted against it. But voting against an obviously bad bill isn't the real tax test; after all, most House Democrats are in very safe seats, and the issue wasn't particularly risky even for the 41 Democratic senators who voted no. The real question is whether Democrats can say forthrightly, in an election season -- for they will surely be asked repeatedly -- that they would repeal or roll back the Bush administration tax cuts in order to fund other national priorities.
So far, the evidence on this question isn't very encouraging. House Minority Leader Nancy Pelosi appeared on Meet the Press recently to plug the Democratic agenda. She was discussing the Democratic proposal for energy independence when Tim Russert suggested to her that any such comprehensive plan would require large government subsidies to encourage industries to change; would you, Russert asked, “roll back the Bush tax cut to pay for it?”
Russert tried four times to get Pelosi to say yes -- and note that he said “roll back,” not repeal, which gave her wiggle room. And, four times, Pelosi -- who voted against the tax cut -- hemmed and hawed.
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All right, she can perhaps be forgiven for not wanting to play Russert's game of gotcha! But Democrats can't avoid this question forever. And they shouldn't. But they do, and there's one main historical reason why.
If it's true that those who are ignorant of history are doomed to repeat it, it's also the case that those who are too mindful of history tend to wallow in it. So it is with Democrats and taxes; Walter Mondale tried that, they say, referring to Mondale's ill-advised proclamation in 1984 that he'd raise taxes, and look what happened to him.
But there are two reasons why 1984 is very much worth forgetting. First, the circumstances are dramatically different: Today, unlike the 1980s, Americans have firsthand experience of a period of conservative failure. That experience, of watching as fake solutions are applied to large problems (when the problems are acknowledged at all), is new for most Americans, and it gives liberals and Democrats an opening to make a bolder alternative case than most of them have been willing to make for some time.
Second, no one is saying that Democrats should do what Mondale did. Instead, Democrats should emphasize both fairness (making those who got the bulk of the cuts pay their freight) and the pressing needs that face us. Democrats should say simply to people: “If what you want is more tax cuts, vote Republican. But look around you. We have needs as a people. All of us agree, for example, that we need to wean ourselves off foreign oil. We can do that as Americans. But we can't do it through tax cuts. You and your neighbors can't get together, pool your tax cuts, and create a fund to encourage businesses to invest more in biofuels. Only the federal government can do that. So you need to decide: If you want to kick the problem of energy independence down the road to your children, then vote Republican. If you want to be serious about trying to do something about this problem, and create a solution from which you and your children will benefit, then you better vote for me, because I'll do something about it, and the Republicans won't.”
Obviously, this won't be an easy sell. But a clear majority of Americans now agree with at least the last sentence of my imaginary monologue. That's what's new, and it's a reality that has the potential to change the nature of the tax debate as we have known it.
