Mitt Romney understood the problem and paid the price. Which only means Republicans need to play smarter.
The Republican tax plan that won a majority of votes in the House and the Senate fails to win anything close to half of the public.
Gallup found support from just 29 percent of Americans with opposition from 55 percent. Quinnipiac revealed much of the same with a 29-53 percent split.
Tax cuts once acted as the furthest thing from a third rail in American politics.
An AP-NBC News poll taken after the first month of the Reagan presidency reported 71 percent of the American public in favor of the president’s tax-cut proposal and 15 percent against.
Americans offered an unambiguous response to tax cuts in 1981. They offer an unambiguous response to tax cuts in 2017. Nothing changed in 36 years except everything. Americans were in favor of tax cuts before they were against them.
A Republican nominee in between Ronald Reagan and Donald Trump surely got a bead on the changing tax climate before most did.
“These are people who pay no income tax,” Mitt Romney said of the solid Democratic voting bloc. “Forty-seven percent of Americans pay no income tax. So our message of low taxes doesn’t connect.”
The broadcasting of the surreptitiously obtained recording allegedly displayed Romney’s tin ear politically. But it did so in a way that affirmed Michael Kinsley’s definition of a Washington gaffe as “when a politician tells the truth — some obvious truth he isn’t supposed to say.”
The Tax Policy Center pointed out last year that nearly 80 million households paid no federal income tax for 2015. That amounts to 45.3 percent of households. Does that number sound familiar? If Mitt Romney was off, he wasn’t off by much — 1.7 percent, to be precise.
When about half the people pay no income taxes, about half the people do not favor cutting income taxes. This, more than mass immigration or the internet or any other change since 1981, led to the declining fortune of politicians who want you to keep more of your fortune.
When Democrats bemoan “tax cuts for the rich,” that reflexive verbal tic that greets any hint of a reduction in rates, they speak a certain truth. But the phrase lies by omission. If the poorest 45 percent pay no income tax, then any tax cut necessarily benefits wealthier Americans in a disproportionate manner.
One solution to this inequality under law involves imposing taxes upon those not currently paying them. A better solution requires expanding the tax base by creating an opportunity society producing more makers than takers. This strikes as the healthier, and more politically expedient, solution for enthusiasts of a smaller, less intrusive federal government.
Mitt Romney merely diagnosed a problem. The challenge for conservatives is to come up with solutions to address the issue raised by Romney. Readers of this column encounter various proposals aimed at creating the type of opportunity society that makes the problem highlighted by the 2012 Republican nominee, and experienced now by Trump, moot.
Allowing parents to spend the education taxdollars allocated for their children on the schools of their choice undoubtedly results in sending makers into the workforce. Reining in healthcare costs, which swiftly approach a fifth of our gross domestic product, strikes as a more effective, and popular, means to the same ends as tax cuts — allowing Americans to keep more of what they earn. Repatriating money from American corporations overseas by imposing a make-up-the-difference tax that compels those companies to pay the same rate whether they keep the money here or abroad boosts the American treasury and the American economy.
Whether one buys into these particular solutions or not really does not matter as much as whether one embraces the idea that conservatives must alter their means to achieve their ends. This does not require renouncing the idea of tax cuts. It just means accepting that they pay off neither politically nor economically — because of the growth in health care expenses, the decline in the cuts politicians propose, and the shrinking pool of taxpayers — as they once did. Tax cuts no longer appeal to the majority of Americans because nearly a majority of households do not pay income taxes. Only through adopting policies that help Americans create wealth can those tax cuts come to mean for Americans what they did in 1981 when 71 percent of the public supported them.
We no longer dump quarters in Pac Man arcade games and dimes in payphones as we did in 1981. Women do not wear legwarmers. Men no longer wear striped sports socks to their knees.
Situations change. Principles need not change with them. But tactics should.
Hunt Lawrence is a New York-based investor. Daniel Flynn is the author of five books.
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