Ryan Streeter
I miss Jack Kemp. No Republican was better at connecting the high-level requirements of capital formation with the ground-level needs of the ordinary guy.
We could use his voice today as the Republicans argue about the tax deal as it heads to the House.
For instance, here’s Kemp in a 2008 op-ed, one of the last he wrote, during the last presidential campaign:
Republicans should promote additional middle-class tax cuts through fundamental reform of our confusing, contradictory and confiscatory tax code.
He goes on to support tax code simplification along the lines of Paul Ryan’s Roadmap proposal and Social Security reform that alters the payroll tax system in favor of personal savings.
Two things stand out:
First, Kemp framed tax reform as a worthy goal not because it adheres to an anti-tax ideology, but because it helps ordinary people. He was a Republican who was not afraid to make “the middle class” the centrepiece of tax reform. Simplifying the tax code should have as a goal producing higher disposable incomes for the middle class.
Second, in the rest of the op-ed, Kemp characterizes tax policy as growth policy – and that which helps growth helps people on all rungs of the income ladder. Lower marginal rates and a simplified tax code combine to help Americans achieve the American Dream.
In today’s Wall Street Journal, Daniel Henninger asks whether our leading 2012 candidates can articulate what taxes are for in the first place.
Do we pay taxes to support federal, state and local government, to reduce the deficit, or just maybe for something else?
It's possible this question hasn't come up in a serious way since it was first asked by a peasant in Robin Hood's Sherwood Forest. For centuries, no one has doubted that the textbook answer suffices: Taxes are levied on behalf of some public purpose. But the modern tax-paying peasant insists on asking: With a U.S. budget at $3.5 trillion annually, with Harry Reid this week off-loading a 1,924-page "omnibus" spending bill, what is the public purpose of taxes?
Henninger, in a way reminiscent of Kemp, says that the most important public purpose served by taxation has to be growth – the kind that will keep the American economy pre-eminent.
A radical (in the best sense) 21st-century tax debate—such as over Bowles-Simpson's three stripped-down marginal rates, topping at 23%, and lower taxes on business—would challenge the conventional 100-year-old idea in the U.S. that the first purpose of a tax regime is to ensure the functioning of the state. In the hypercompetitive world we will inhabit for at least a generation, might not it be time to rewrite the textbook? To ensure American well-being, the pre-eminent purpose of a modern tax system should be to achieve the highest possible level of growth in the private economy with a competent, efficient state in a supporting role.
Republicans are paying a lot of lip service to “growth” in the tax debate that has broken out in the party. The irony about the current debate, though, is that the party has been fairly lax over the past couple years on forming a more radical, growth-oriented tax policy than just “extending the Bush tax cuts.” The debate they're having now is filling the vacuum left behind by their earlier inattention.
The bigger question is what the GOP will do on tax policy after the votes are counted on the current deal and how it will serve one sacred metric: are wages rising in the broad swath of middle America.
We need Jack Kemp more than ever.
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