Patrick Garry
The conservative case for a tax compromise
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By Patrick Garry
October 22, 2011

The issue currently dominating the political spotlight is the tax-on-the-wealthy issue. It has become the pillar of President Obama's re-election campaign. It is the only specific issue that could even remotely be characterized as the message-issue of the Occupy Wall Street protest. It is the only issue on which Democrats seem somewhat confidently unified. It is also one of the few issues on which the public appears aligned with President Obama.

On the other hand, both conservatives and Republicans remain steadfast in their opposition to any tax increase of any kind. They want to address the massive federal deficit, but they want to eliminate it strictly through spending cuts. But those cuts will have to be astronomical — and given the difficulty in persuading Democrats and the public to go along with the token spending cuts so far agreed upon by Congress, achieving the kind of cuts necessary to bring the deficit under control seems almost impossible at this time.

The two sides of this issue stand at polar opposites. Democrats and liberals want to impose hefty taxes on "the rich" — and of course, one has to wonder who will qualify as "the rich." Republicans and conservatives oppose any and all tax increases, and are gambling that the public will support this uncompromising position. But this is a dangerous gamble, particularly at a time when such a gamble is not necessary. The American public is in the midst of a significant rightward shift in attitude from 2008, and this shift is the real political prize. It is the only lasting goal, and it should not be risked for the sake of some intermediate goal.

America's Conservative Leanings

In current opinion polls and through the 2010 elections, Americans have increasingly expressed their conservative tendencies. They are uncomfortable with Obama's dramatic increase in government spending, the government takeover of the healthcare industry, and the unprecedented and unpredictable over-regulation of the financial services industry. They are repulsed by the class warfare tactics of the Obama administration, as well as its blind adherence to European-style social welfare policies at a time when Europe is going bankrupt. Americans are beginning to doubt the repetitive promises of escalating government benefits, especially in the face of such dramatically escalating government debt. They are starting to remember what America means — a free society that depends on individual initiative for its prosperity and vitality, rather than on government-allocated benefits and mandates. They are returning to their belief in a growth economy generated by the private sector, while at the same time seeing the false promises of a society in which citizens battle each other for who can grab a front spot in the entitlement hand-out line.

It is this conservative revival of the American public that is the most important and most lasting endpoint. But because of the unpopularity of the Bush presidency, the public is not going to make some miraculous, immediate jump to this endpoint. Americans are going to have to be led steadily back to that point. They are going to have to be shown the wisdom and workability of the conservative position. It isn't going to happen all at once. It is going to happen through the practice of the conservative virtues of patience, temperance and frugality.

Unfortunately, the no-tax-increase-of-any-kind position contradicts these virtues of patience, temperance and frugality. After all, what about conservatism opposes the elimination of special tax breaks for certain corporations in certain industries? And when the public clearly favors some tax increase on the wealthy to address the massive government deficit, what larger goal is to be gained by flouting that opinion?

The Principal Conservative Principle

After all, the ultimate goal is not a particular tax rate. There is nothing ideologically identifying about a specific tax rate. What is a conservative tax rate? Thirty- five percent? Twenty-eight percent? Twenty-five percent? Twenty percent? Seventeen percent? Nine percent? The ultimate goal is something much bigger — the achievement of a limited government, living within its means, confined to its constitutional functions, not suffocating the private sector. This is the real goal of American conservatism — the real goal of the Tea Party.

Taxes are not set in isolation. They are needed to pay for legitimate government activities, for a government authorized and conducted according to the constraints of the Constitution. So taxes are the secondary goal — the primary goal is a return to limited government, acting within prescribed constitutional limits. It is this goal that should be the ultimate pursuit of conservatives.

If special tax deductions or credits are eliminated for some corporations in the course of a political deal that ultimately cuts back the scope of government and the extent of government spending, then the right step in the conservative direction has been taken. Compromise has become a rejected term in conservative circles, but there is nothing inherently wrong with compromise. There are good and useful compromises — and there are bad or appeasing compromises. The Constitution and Bill of Rights were the results of good compromises. The Kansas-Nebraska Act and the carving up of Europe at Yalta were the result of bad compromises. But there is nothing inherently wrong with compromise — it all depends on the ultimate result of that compromise.

A Principled Compromise

Democracy requires compromise, and compromise may be the only way for conservatives to continue their campaign against the perverse legacy of the New Deal — a legacy of unlimited government bribing the citizenry with an entitlement culture. If conservatives could pick their scenario for 2020, they would rather have a limited government constrained in the scope of its power and its reach into American society than a particular tax rate on high-income individuals.

To further their political cause, conservatives ought to consider a compromise on the tax issue, particular a compromise that achieves the larger goal of limited government. For instance, conservatives should agree to a tax increase on the Buffett-type taxpayers, who seem to be begging for such an increase, if three conditions are met. First, any tax increase must be tied to a significant decrease in federal spending that is much larger than the tax increase. Second, it needs to accompany a balanced budget amendment. And third, the revenues from such an increase should be devoted only to paying off the existing government debt and not to the continued sustenance of current government operations.

The goal is to restrain government, to impose fiscal discipline upon it, and to revive limited government as a guiding political and constitutional principle. The goal is to restore the unique foundations of America, to return to an America in which government no longer undermines self-reliance and personal responsibility by making future generations pay for the retirement entitlements of present generations. Conservatives should not let the pursuit of this goal be derailed by taking positions that antagonize the public and feed into the long-standing misperception of conservatives as concerned only with the wealthy and powerful of society.

Winning Over the Public

There is an expansive conservative agenda. The breadth of this agenda is often reflected in the often bitter and contentious debates between the Republican presidential contenders. But no agenda can be accomplished in one fell swoop. It must be presented to the public and gradually adopted by that public, step by step. In the current political climate, the first step is to win over the public on the issue of government debt. The morality of debt can lead to morality campaigns in other areas. But only if conservatives succeed in their cause for limited government and a decrease in government debt will they be able to take their other issues to a public that just three years ago turned completely against the conservative message.

At this moment in time, fiscal and economic issues are at the center of our national crisis, just as the economy and the Soviet Union were defining issues in 1980. There are many other social matters that are vitally important, but at this moment in history, America's survival depends on what we do about the escalating government debt — witness, for instance, the chaos in Europe. This is the issue on which conservatives can unite a nation and put it back to the course that made it the most prosperous, vibrant and free nation on earth.

© Patrick Garry

 

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Patrick Garry

Patrick Garry is a professor of law at the University of South Dakota, and Director of the Hagemann Center for Legal & Public Policy Research... (more)

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