Archive for Sunday, July 27, 2003

Democrats may have tax counterattack

July 27, 2003

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— For more than 20 years now, since Ronald Reagan's first election, it has been an article of faith among Republicans that taxes are their killer issue to use against Democrats.

GOP candidates regularly follow Reagan's example and promise tax cuts, and when Democrats say they will raise taxes -- as Walter Mondale famously did in accepting the presidential nomination in 1984 -- they wind up losing 49 states.

This explains the lip-smacking delight the GOP is taking in the spectacle of the current crop of Democratic presidential hopefuls calling for a rollback of some or all of the past three years of Bush tax cuts. A recent broadside from the Republican National Committee headlines, "DEMOCRATS WANT TO RAISE YOUR TAXES" and backs the charge with quotes from six Democratic contenders.

So it seems at least counterintuitive -- and maybe highly improbable -- for Democratic pollster/ political consultant Stan Greenberg to argue that taxes can be a good issue for his party.

In a memo he sent out earlier this month, Greenberg, a sometime adviser to Bill Clinton and Al Gore, argued, on the basis of a June poll of 1,000 likely voters, that the Bush tax cuts and the Republican approach to taxes command only "lukewarm support." Further, he said, "The voters are angry about taxes, not because they think their taxes are too high, but because the wealthy and corporations do not pay their fair share."

Rather than making the last three years of tax cuts permanent, as Bush proposes, voters prefer shutting "the loopholes and tax shelters used by the wealthy and corporations" and requiring high-income people to pay Social Security taxes on all of their earnings, Greenberg said.

The implication of this analysis is that a Democrat proposing major reforms of the tax system could trump Bush's record of tax-cutting and his promise of more such reductions to come.

I was skeptical of these conclusions, but after examining the poll, some of my doubts have been whittled away. Was it a bad sample? Well, the Bush approval score, 61 percent, was exactly in line with other polls taken around the same time. In a trial heat against a generic Democrat, Bush won 50 percent to 40 percent. And a straightaway question produced a 54 percent to 40 percent majority in favor of the Bush tax cuts.

No discernible bias there. It was only when Greenberg asked other questions that the outlines of a possible Democratic counterstrategy appeared. One clue came with a query about "what bothers you the most about taxes." Forty-six percent said it was "the feeling that the wealthy and corporations don't pay their fair share," compared to 31 percent who said it was the complexity of the tax system and only 14 percent who said, it was "the large amount you pay in taxes" that bothers them most.

When a variety of possible tax changes were outlined, the only ones a majority said they strongly favored were closing the tax loophole that allows corporations to set up offshore tax havens in places like Bermuda and collecting Social Security taxes on a person's entire earnings, instead of capping them at $87,000 as is done now. Canceling recent tax cuts for the top 1 percent of earners enjoyed as much support as making all the tax cuts permanent. And moving to a flat tax -- the dream of conservatives such as Steve Forbes and Grover Norquist -- finished near last.

While Greenberg is criticized by some moderate Democrats for encouraging the populist tone of Gore's general election campaign, the tax reform issue is one on which centrist Democrats see eye to eye with him.

Several of the presidential candidates have offered pieces of tax reform, mainly by revising the rates to collect more revenue from the top brackets while reducing levies on the working class. Sens. Bob Graham and John Edwards have outlined the most detailed plans. But overall, the main Democratic message has been a pledge to roll back the Bush tax cuts -- an approach that leaves them open to the charge of just wanting to raise taxes. "The reform message hasn't jelled yet," Marshall said.

The conventional wisdom is that taxes are a loser for Democrats, a subject they should avoid. Someone may decide it's time to challenge the theory.

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