One of the most important issues related to our economy is taxes and what the impact of various tax policies will have on our country. While Republicans often have facts to support their tax plans, they often lose the tax debate because they allow the media and Democrats to frame the conversation. Unfortunately, perception is often more important than reality in politics and the debate over taxes is no exception. Republicans have to reframe the debate and focus on a few key points. (Key Points that Republicans should use have been italicized)
1) The money that is counted for future tax revenue DOES NOT belong to the government; it belongs to the people who earned it. The reason we have taxes is to pay for what the government needs to do, not just for the sake of getting government as much money as possible. Liberals often say that tax cuts are creating bigger deficits (often adding that the purpose of which is to give money back to the rich). Well reality is that the money already belongs to those people, they earned it and government does not have an inherent right to it. If government were an individual, that would be like saying that since someone doesn’t come to your door and give you a thousand dollars tomorrow, they are somehow taking away a thousand dollars from you. In those terms the liberal framing makes no sense.
2) Staying on the idea that tax cuts create deficits, liberals are constantly touting the idea that somehow only tax raises lead to increased revenues. This is false and should be pointed out as a lie every time a Republican discusses taxes. Tax cuts grow the economy and create jobs by bringing about investment. Even though government is taking a smaller percentage of the GDP pie with lower rates, it becomes a much bigger pie. Revenues have gone up following every major recent tax cut (including Bush’s) and yet liberals/the media willfully ignore this fact in order to promote their false premise. Democrats have two responses to this point, both requiring a suspension of reality. First, they point to the Bush tax cuts and the recession that we are now in. Well the Bush tax cuts were finalized in 2003, so they willfully ignore the 4 years of job growth and economic prosperity following the cuts to assign blame for the current crisis. In fact, the same people now defending Obama’s record were attacking Bush for his job growth when unemployment was at 5%. This is the same false framing that Obama now uses with the economy by claiming that despite the poor recovery his administration turned it around as displayed by limited job and GDP growth. Recessions always end eventually, so doing nothing would have resulted in GDP and job growth anyways, but the current poor numbers actually show Obama’s policies have predictably hindered a more effective recovery. Second, they point to the Clinton years and the high tax rates as evidence that those rates are ideal. What they fail to consider about the Clinton years was it was a period of innovation and growing technology & housing bubbles. This was the very time when the internet and computers began to take over our lives and thus create whole new industries; almost nothing government could do at the time would screw up the economy. Higher tax rates stifle innovation, investment and growth, but those things were impossible to stop in the 1990’s. America thrived in those years despite government policy, not because of it. Furthermore, Republicans should always point out that every major accomplishment (surpluses, welfare reform etc.) Clinton is touted for was done by Republicans and opposed by Democrats (now taking credit).
3) The media will constantly frame the problem as one of revenues and not spending, but that just isn’t the case. In fact they will often demand that Republicans agree to tax raises for the sake of bipartisanship, but fail to press Democrats on spending cuts (the actual source of the problem). The fact is that tax revenues at any rates have never exceeded 21% of GDP, but spending is currently closer to 24-25% of GDP. The only real solution is to focus on cutting spending, not raising revenues at the expense of jobs and the economy.
4) Keeping tax rates at the current level is not a “tax cut”, but a prevention of a tax raise. The economy already depends on and has adapted to current levels, so raising these levels is a tax hike that will limit growth and jobs at a time when we need them most.
5) Many small businesses file individual tax returns and would be hurt by any tax hikes, which would cost us jobs we cannot afford to lose. Furthermore, the “rich” often have lawyers/accountants to limit their tax liability. Tax raises actually limit investment, thus hurting the middle and lower classes that depend on investment for jobs. It is those people that liberal policies hurt the most.
In summation, Republicans should constantly emphasize that their tax policies mean the best of both worlds: People get to keep more of their own money, real job growth and the government takes in the revenue it needs to perform its objectives. The facts and history back up our arguments, so please do not allow the media and perception to lose us the debate.