Jasper Smith

Commentary on politics, economics, culture and sports.

Republican elites and not so elites

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Reihan Salam discusses the rift between GOP elites and their poorer cousins:

as socially conservative Democrats have become Republicans, the party’s rank-and-file has grown less reflexively anti-statist, which helps explain resistance to Social Security private accounts, among other things. And yet the conservative movement remains (for the most part) allergic to statism, whether it is in the form of “compassionate conservatism” or “national-greatness conservatism” or some other ideological innovation. (The section on the Medicare prescription drug benefit is particularly persuasive.)

Among elite conservatives, the majority is socially conservative, but there is a large and vocal minority who are agnostic on the hot-button, “fever swamp” issues. Popular conservatism is held together by the glue of social conservatism and a series of policy positions, on taxes, crime, and national security, that reflect a broadly traditionalist outlook. When Republicans argued that Democrats would raise taxes in the run-up to the election, they focused, somewhat disingenuously, on the increase in the child tax credit. Almost no one believes that Democrats want to cut the child tax credit. As far as I can tell, the consensus among Democrats is that they’d focus any tax increase on high-earners. All the same, it’s easy to understand why President Bush constantly talked about the (supposed) Democratic threat to the child tax credit: it is a tax cut that reflects the values of middle Americans.

Let’s just say I don’t think it would be crazy for Republicans to place more emphasis on policies like increasing the child tax credit in reality as well as in their campaign rhetoric.

Emphasis mine. I generally agree with Reihan’s take on things. But he’s being somewhat self-contradictory here — at least when he later in the same piece goes on to write critically about the “hidden welfare state of tax subsidies” (targeting the affluent). Thing is, the tax code is very complicated as it is. My eyes really glaze over whenever the discussion turns to any type of tax subsidy, er, credit.

I can’t be the only person who’s basically supports the idea of strengthening the safety net (all that middle class insecurity is very bad, politically, for free markets and free trade, after all) but is also basically a fairly doctrinaire free market conservative in my views on the economy. In other words, I’m probably in agreement with quite a few liberal Democrats when it comes to things like healthcare, but I part company with them on issues like Wal-Mart and globalization.

So, I’d suggest an attractive combination of stances is to support making things easier for Sam’s Club Republicans (by guaranteeing health insurance coverage, say, or creating a wage replacement system) and at the same time really pushing for a federal tax code the folks at CATO or Club for Growth could be proud of. I suspect even a lot of hard core anti-statist ideologues wouldn’t be all that opposed to living in an America with a tad more European-style domestic spending if that same America had also gotten rid of the income tax.

One upside is that in theory, you get a free lunch when you radically reform the tax code in favor of something far more efficient. All things being equal, ending the use of the tax code to allocate capital should boost growth. Thus, if one were interested in increasing government spending on folks vulnerable to the vicissitudes of the market, reforming the tax code would be an obvious thing to do, since it should nudge revenues upwards even if the reform itself is designed to be “revenue neutral”.

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Written by Jasper

December 8, 2006 at 10:17 am

Posted in Economics, Policy, Politics

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