How, then, does the left still manage to gain traction from its “shared sacrifice” slogan? In part, their arguments sound plausible when they contrast “painful benefit cuts” for the destitute with “lavish new tax breaks” for the super-rich. The president insists that it’s wrong to “balance the budget on the backs of the poor” in order to give “more tax cuts to millionaires and billionaires who haven’t even asked for them.”
In responding to such toxic us-versus-them rhetoric, Republicans face the daunting task of reassuring the public that the Ryan budget plan actually calls for corporations and wealthy Americans ultimately to pay more to the government, not less. The GOP overhaul follows the basic outline of Obama’s own deficit commission, mandating a sharp reduction in tax rates, but producing higher tax collections because of the elimination of loopholes and special-interest tax breaks that sustain a monstrously complex, inefficient, and utterly irrational system.
The public feels rightly outraged at accounts of profitable corporations (like General Electric) and occasional multimillionaires who find a way to escape taxes altogether. But the proper means for dealing with such anomalies isn’t to raise tax rates; it’s to eliminate illogical breaks and unjustified writeoffs in the tax code. After all, a fat cat who’s currently paying little or nothing to the IRS won’t suddenly cough up a bigger share because you lift the top marginal rate by 4.6 percent (as Obama proposes) or even 44.6 percent. The same breaks and dodges and accounting tricks will still apply until the government takes them away and institutes a flatter, fairer, vastly simpler tax system--one that will spare Americans from the prodigious waste of time in tax compliance, estimated by economist Arthur Laffer as costing more than $400 billion a year.
Leading up to the 2012 election, it’s even more important for Republicans to refocus the argument on the future size of government, rather than allowing a distracting dispute over who should pay to keep the federal operation at its current size, or growing even larger.
Washington’s spending took an average of 18 to 19 percent of GDP during the first 62 years after World War II; under President Obama, that percentage has soared and, according to the president’s own budget figures, will hover near 25 percent for the foreseeable future.
And what crucial services do the feds now provide to a helpless, hapless populace that they ignored in the prior six decades?
This challenge leads inevitably to the one uncomfortable question liberals can’t evade: How can they honestly compare the right of federal beneficiaries to the money they receive from Washington’s largesse to the right of hard-working citizens to the money they earn for themselves?
The term “entitlement” has become an important feature of this debate. In a just society, the most important entitlement would involve the right to keep as much as possible of the fruits of your own labors—not maintain some arbitrary level of governmental support you never earned.
Regardless of the specific details in one deficit reduction plan or another , the differences in underlying ideology remain stark and unmistakable. The left wants government to take more and spend more, commandeering a larger chunk of the overall economy. The right wants government to spend less and take less, leaving the nation’s citizens with a bigger, broader zone for untrammeled control of their own lives.
Let the Democrats preach about sacrifice; conservatives need to emphasize opportunity. What they want you to give up isn’t just dollars, it’s power. And what free marketeers insist that you should keep isn’t mere money, it’s the individual choice and personal liberty that provide the only real hope for economic recovery and national growth.
This column appeared originally in The Daily Beast on May 6, 2011