Do you hear that? No? Listen closer. There. That. That, coming from Louisiana, is the sound of the end of trickle-down economics. Economists have known for a while that personal marginal tax rates, and in particular those on the rich, don’t seem to have much of an effect on the economy. As we wrote in September, even Reagan’s economist did not find any evidence that the Reagan recovery had come from the Reagan administration’s personal income tax cuts. Over the last four years, apostate Republican thinkers such as Bruce Bartlett and David Frum began to agree. Then most of America did. Even a group of CEOs of major corporations came around to the idea that raising tax rates on the rich would not hamper growth.
But no sitting Republican politician joined them, certainly none with big plans. Until this week. Bobby Jindal is both: governor of Louisiana and a strong prospect for 2016. On Monday he told Politico, “We cannot be, we must not be, the party that simply protects the rich so they get to keep their toys.” He also said the party shouldn’t tolerate “bizarre, offensive comments” or “dumbed-down conservatism.” Jindal’s tone isn’t completely new. In August of 2011, I listened to him address a closed gathering of the annual conference of the American Legislative Exchange Council in New Orleans. He dismissed anyone who questioned the president’s birth certificate, for example, with a great line: “I’m not worried about where Barack Obama is from. I’m worried about where he’s going.”
But at the time, a year before the election, he didn’t question the central tenets of conservative economic belief. He focused on government spending, pointing out that the state, like his own children, would always come back to ask for more money. His biggest applause line came from an endorsement of a balanced-budget amendment to the Constitution. And he didn’t say anything about a party that simply protected the rich.
In his remarks Monday Jindal didn’t come right out and say he supported increasing taxes on the rich. But it was still apostasy, especially coming from the new chairman of the Republican Governors Association. Imagine that in October a prominent Democrat had said, “We are not the party that simply protects the rich so they get to keep their toys.” The only possible Republican response would be an accusation of class warfare. Yet Jindal, a two-term governor with a future, did just that. It’s unlikely that he’s had a come-to-Jesus moment on economics since I heard him speak a year ago. It’s far more likely that trickle-down economics, having failed with economists, has now been shown to have failed with the public. Protecting low taxes in general and job creators in particular is as much an electoral identity as it is an economic policy.
For three decades, Republicans have been the party of lower taxes, all the time, for everyone. This is simple, strong, and easy to understand. Barack Obama drew his clearest policy distinction with Mitt Romney on exactly these grounds: Obama would raise taxes on the rich. You can argue whether the president has a mandate at 52 percent, or what his mandate’s actually for, but it looks like Bobby Jindal has made a decision on his own. He’s calculating that trickle-down policies—policies that explicitly, unapologetically protect the rich—will never get a Republican elected president again.
This is a weaker position, rhetorically. “I’m for some low taxes for some people” is harder to explain than “No new taxes.” But it’s one of the uncomfortable subtleties that Republicans are going to have to learn how to say out loud. Jindal is effectively announcing his candidacy for president in 2016. He also just pulled the drain plug on the rising tide that lifts all boats.