Are Republicans Too Hung Up On Tax Cuts?
James Pethokoukis, writing for the American Enterprise Institute, makes the case for Jon Huntsman as a supply-sider President who would reduce tax burdens. But is support for lower taxes enough?
If elected president, Huntsman says he would like to slash tax rates to their lowest levels since before America entered World War I and eliminate taxes on capital gains and dividends. Powerful supply-side medicine for an anemic economic recovery. Huntsman has embraced Representative Paul Ryan’s transformational, market-oriented debt-reduction plan, calling it “the model I would work from.” He’s also pro-life, a dedicated free trader and—at least as evidenced by his sweeping bank reform plan—an ardent anti-crony capitalist.
Of course, conservatives would sure like more details about Huntsman’s views on dealing with climate change. And just how would he match defense cuts that might reduce spending to Clinton-era levels with superpower America’s global commitments and power-projection capabilities? A lot more clarity is needed there. And the Club charges Huntsman with being disinterested in cutting spending when governor.
Even stipulating that Pethokoukis’ characterization of Huntsman’s policy positions are accurate (and I’m not prepared to dispute it) is this enough? Shouldn’t we want someone who will cut taxes and limit government?
For instance, George W. Bush was a tax cutter. The Bush tax cuts were some of the most significant reductions in federal tax burdens in the nation’s history. But Bush, like Huntsman, was also disinterested in cutting spending. Which means that even as the Bush tax cuts were spurring economic activity that, in turn, was pumping up federal tax receipts we still had budget deficits. Because spending grew even faster.
If the litmus test for being a Republican/conservative is simply support for reductions in tax burdens, then we’re missing the boat on the debate over the proper role of government. Even the way supply siders often talk about tax cuts as being vehicles for greater tax revenues seems to be all about fueling more spending, and thus bigger government.
Tax policy is important, no doubt, and I am almost always in favor of lower taxes. But a higher priority should be – must be given our perilous national fiscal situation – reducing the size of government. And that means cutting spending.
If we cut taxes, but still run deficits, all we’re doing is delaying tax increases. It’s the spending, more than the taxes, that matters.
Tags: big government, tax cuts
