Ronald Reagan's most important contribution to the American political dialogue was his ability to move the tax issue from an economic-populist issue into a populist, blue-collar one. Under George W. Bush, however, the issue has switched back to one of class warfare, as increasing numbers of Americans have paid no taxes at all and the rates on those who did pay taxes fell. Now, a chance encounter with "Joe the Plumber" has afforded the Republicans the chance to use taxes as a blue-collar issue.
The opening Joe provided and John McCain skillfully exploited in the third presidential debate gives the GOP ticket its first long shot at victory since McCain punted on the terrible, pork-laden, corporate-giveaway "rescue" bill Congress passed and Bush signed. Obama's tax plans and spending programs have emerged as the key point of difference between the campaigns. And the Democrat's comment to Joe that he saw his tax policy as a "way to spread the wealth around" underscores the motive behind his program: to redistribute income. Obama might as well have told Joe, "I want to take the hard earned money you make fixing pipes and give it to other people."
If the Republican Party concentrates its fire on the tax issue and the redistributionist impulse behind Obama's plans, it can close the Democratic lead point by point, day by day, until the election. McCain's campaign must resist the temptation to take random shots on other issues and zero in on the tax-and-spend issue, stressing how taxes penalize those who work hard and live right.
In fact, the rich are paying vastly more in taxes than they ever have. "Reality Check," by Dennis Keegan and David West, points out that the percentage of income-tax revenues paid by the top percent of the population has almost doubled in the last 20 years; it now pays 40 percent of all income tax. (The bottom half in income pays less than 3 percent.) Despite the lower rates, the rich are paying more in taxes because they are earning more and more. In the last eight years, real, after-inflation income growth for the top 10 percent of the population has been more than 45 percent.
Essentially, the tax debate comes down to economic populism versus social populism. The Democratic economic populists rail against the rich and demand that they pay more in taxes. The Republican social populists decry the notion of income redistribution as rewarding failure and penalizing hard work. Until Joe, the economic-populist polarity dominated the presidential race to the detriment of the Republicans. But now Joe has brought the social-populist argument back to life.