Why Republicans Will Best Democrats on Tax Fight

U.S. Senator Patty Murray of Washington thinks her fellow Democrats hold the upper hand in the fight over taxes.

Murray, who leads her party’s campaign to elect senators, thinks she can make Republicans buckle by giving them an ultimatum: Either they stop trying to extend tax cuts for high earners, or they see middle-class taxes rise.

It’s an empty threat that should frighten no Republican.

The tax cuts enacted under President George W. Bush expire at the end of this year. Republicans want to extend all of them, while Democrats say they favor keeping only the cuts that directly benefit the middle class. Some liberals -- usually not ones in elected office -- say they should all go, because the government needs the revenue.

In a speech this month at the Brookings Institution, Murray explained how she sees this debate playing out next year. Taxes will have risen for everyone. Democrats will introduce legislation to restore only the middle-class tax cuts. Republicans will go along to avoid being blamed for blocking those cuts just so they can get “new tax cuts for the rich.”

Eyeing 2014

Of course, if Republicans sweep the election, none of this will come to pass. They would extend all the tax cuts, probably by simple-majority votes. If President Barack Obama wins re- election and Republicans take the Senate, Congress will extend all the cuts and dare the president to veto it. Republicans will then blame high middle-class taxes on Obama and look forward to the 2014 elections.

Democrats would respond by blaming the higher taxes on Republican intransigence about upper-income tax cuts. In most polls, voters side with Democrats over Republicans on that. Even so, Democrats would lose the blame game. Voters usually praise or blame the president, not Congress, for almost anything. They think of Democrats, not Republicans, as the party that is most enthusiastic about tax increases.

Parties have a very hard time countering these long-held impressions. Every so often Republicans introduce big campaigns arguing that they are trying to save Medicare or Social Security while Democrats are letting the programs collapse. It never works, because the storyline is too counterintuitive for voters. So it is with tax increases. Even if the Democratic spin and the Republican spin cancel each other out, voters will hold Democrats responsible.

Because the party in the White House tends to lose seats in midterm elections, and because Democrats did so well in the 2008 Senate elections, they would have a rough November 2014 in store even without the tax issue. Add taxes to the mix and you have the makings of a bloodbath. Republicans aren’t going to prevent that just to let Democrats get their way on policy.

There is, however, one way for Democrats to make sure that this debate goes even worse for them. That’s to spend the next several months loudly advertising their willingness to let middle-class taxes rise if they don’t get their way. If Democrats sound like they’re the ones who are most willing to see higher middle-class taxes, they will reinforce rather than counter the impression of their party as enthusiastic tax- increasers.

Republicans ran into a similar problem in budget battles with President Bill Clinton in 1995-96. Conservative Republicans kept saying that if Clinton balked at their spending cuts, the government would shut down and Democrats would have to accede to their demands. Once the government actually shut down, Republicans tried to blame Clinton. They had passed bills to keep the government running, they said: The shutdown was Clinton’s fault for vetoing those bills.

The public didn’t buy it. Voters knew that Republicans were more anti-government than Democrats. Republicans had been talking gleefully about a shutdown showdown for months. If Murray’s strategy prevails among Democrats, her party’s position will be weaker next year for similar reasons.

Talking Tough

And weaker this year, too. How can Democrats possibly win votes this fall by saying they’re willing to let taxes rise soon after? Although some liberals like it when Democrats talk tough about not compromising on taxes, their votes are already safe. Murray and any Democrats who follow her lead are handing Republicans the opportunity to tell the rest of the electorate that Democrats are perfectly happy to see middle-class taxes go up.

Let’s say you’re a Democrat who actually wants to see taxes rise for everyone, including the middle class. In that case you should want your party to hold the White House, refuse to allow the Republicans’ tax-cut-extension-for-all to pass, and let the resulting standoff keep all taxes higher. At that point, trying to blame the Republicans for the middle-class tax increase may be better for your party than saying nothing.

Just keep in mind three things. You’re still likely to have a bad 2014 election. You’re not going to make the Republicans fold that way. And you’re not doing yourself any favors by talking about your plan now.

(Ramesh Ponnuru is a Bloomberg View columnist and a senior editor at National Review. The opinions expressed are his own.)

Read more opinion online from Bloomberg View. Subscribe to receive a daily e-mail highlighting new View editorials, columns and op-ed articles.

Today’s highlights: the editors on housing as a campaign issue and on why Italians should deepen Monti’s reforms and reject Berlusconi; Meghan L. O’Sullivan on Mexico’s energy reforms; William Pesek on Japan’s attempts to weaken the yen; Alexander Friedman and Kiran Ganesh on the butterfly effects of central banks; Carrie Lingo on the excitement of women’s field hockey.

To contact the writer of this article: Ramesh Ponnuru at rponnuru@bloomberg.net.

To contact the editor responsible for this article: Timothy Lavin at tlavin1@bloomberg.net.

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.