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It’s Time to Pay Attention to Kansas

What Sam Brownback's Cautionary Tale Means for the Future of Conservative Fiscal Policy

While it is far too early to write an obituary in Topeka, conservatives must acknowledge the reality that Governor Sam Brownback is fighting for his political life right now in Kansas.  The RCP average has him trailing by 2.8%, with even GOP-leaning polling firm Rasmussen Reports showing Brownback down 10 points earlier this month.  Considering Kansas’s reputation as a bastion of cultural conservatism and a hub for such limited-government stalwarts as Club for Growth-endorsed Reps. Mike Pompeo (KS-04) and Tim Huelskamp (KS-01), this strikes us at first blush as counterintuitive.  When we probe a little deeper, however, we begin to see some cracks beneath the surface that provide important lessons for conservatives moving forward.

Sam Brownback is a disciple of of the Ronald Reagan-Jack Kemp-Art Laffer school of 1980s-flavored supply-side economics.  As a U.S. congressman from 1995-1996, Brownback had a young legislative director on Capitol Hill named Paul Ryan.  Now-Rep. Ryan had himself first made his D.C. bones with Empower America, the predecessor to FreedomWorks, which was co-founded by Kemp.  Around the same time Ryan became Brownback’s legislative director, he also became a speechwriter for Kemp when the latter was tapped by Bob Dole to be the GOP’s 1996 vice presidential candidate.  In true Reagan-Kemp-Ryan doctrinaire supply-side form, Brownback is also squish-y on the issue of amnesty.

The upshot here is that Brownback has deep roots in the supply-side economics movement, which though oftentimes still accepted as GOP orthodoxy — given the near-unanimous adulation of Ronald Reagan’s tax-cutting legacy among conservatives — was actually a novel policy approach developed in the late 1970s as half of the solution to the “stagflation” crisis of the Jimmy Carter administration; the other half was new Fed Chairman Paul Volcker’s tightening of the money supply and raising of interest rates.  (Incidentally, the second half of this Reagan-era policy platform also still finds near-unanimous support among contemporary conservative Republicans, but (a) this post is not really about monetary policy; and (b) I personally find such resentment of a hyper-activist Fed to be more justified based on a substantive evaluation of the contemporary economic landscape, the emerging popularity of “market monetarismnotwithstanding.)  Essentially, supply-side economics — summarized as the slashing of income taxes for the dual goals of both incentivizing economic growth and raising revenue — was a direct response to the Carter era, when the top marginal tax rate was 70%.

The relevance of all of this to Sam Brownback is that his current struggle for his political life is all but universally considered to be resultant from his supply-side economics-infused tax policy vision for Kansas.  Brownback is one of a handful of GOP governors who has embarked on an aggressive tax policy remodeling for his state, consisting of large-scale income tax slashing and a concomitant broadening of the sales tax base.  As one other notable example of a nearly identical policy push, in Louisiana Bobby Jindal embarked on a crusade to wholly eliminate Louisiana’s state income tax by means of broadening the sales tax base before ultimately backtracking due to plummeting approval ratings from which he has thus far only partially recovered.

The economics here happens to be right, from a pro-growth perspective; as a 2012 IMF paper by Santiago Acosta-Ormaechea and Jiae Yoo demonstrated, income taxes are generally correlated with slower economic growth than are both property taxes and sales taxes.  Personally, I would love to see a wholesale repeal of the 16th Amendment and the elimination of the IRS as a federal agency, coupled with the implementation of the FairTax.  As a matter of domestic politics, however, conservatives have to come to grips with the reality that generally conservative states such as Kansas and Louisiana are not always on board with conservative tax policy of the “slash income tax and broaden sales tax” variety.  The incredible economic success that zero-income-tax Texas has had over the past 15 years will presumptively continue to serve as a guidepost for conservative governance across the country — and this will be Rick Perry’s 2016 message, if he indeed decides to once again seek the presidency — but the folks in red states do not always seem to be buying this particular flavor of pro-growth medicine.

Rather than relying on somewhat anachronistic supply-side rhetoric about slashing income tax rates (however righteous such policies may be, and however pro-growth they may be when partially offset by broadened sales tax bases), conservatives must absorb the political lessons of Bobby Jindal in Louisiana and Sam Brownback in Kansas and adapt their policy prescriptions accordingly.  While we can all share the ultimate goal of repealing income taxes outright in this country (via 16th Amendment repeal/FairTax at the federal level and phaseouts/sales tax broadening at the state level), such policies are concededly oftentimes difficult to sell to the grassroots, where many folks may ask — not altogether unfairly — how it is that they benefit from a 3% state income tax reduction when they now have to pay higher sales taxes at the convenience store.  Fortunately, many notable conservatives have already embarked on the task of beginning to remodel GOP fiscal policy.

The approximate answer of where GOP economic messaging is headed can be roughly found in what Ross Douthat describes as the intersection of “reform conservatism” and “libertarian populism.”  (The former term is a misnomer, in my personal judgment, as it inaccurately implies a vitiation of conservatism — yet it has, for better or worse, become a fixture in the contemporary political discourse.)  It can be seen in Senator Lee’s “conservative reform agenda,” and in the writings of the Washington Examiner‘s Tim Carney.  The solution must entail less fixation on slashing marginal income tax rates, and more on ideas like expanding the child tax credit.  The solution must be less focused on rhetorical criticism of capital gains taxes (notwithstanding that they should not exist at all) and focus more on innovative approaches to fixing LBJ’s failed War on Poverty by means of implementing policies like replacing the Earned Income Tax Credit with a low-income wage subsidy.  Only by focusing on economic mobility and “opportunity conservatism,” and less on aggressive income tax-slashing that bears a rather strong resemblance to the Reagan-Laffer-Kemp supply-side revolution of the 1980s, will we once again be able to attract the populist vote, and not merely the trust fund Acela corridor vote that Mitt Romney and the Republican National Committee seemed unnecessarily obsessed with throughout 2012.

In the aftermath of 2012, the RNC’s internal “autopsy” predictably blamed the party’s electoral shellacking on divisive cultural issues: namely, immigration and gay rights.  This is overly simplistic and specious.  The party’s cultural conservatism is generally speaking not the electoral problem nearly as much as its fiscal messaging and policies are seen as not addressing the fundamental economic crises of our time: chronic youth unemployment, stagnant wages, limited economic mobility, and weak growth.  What is needed is a populist and culturally conservative party that shows itself capable of tailoring its economic platform to address these crises.

So yes, let’s block amnesty and tout the pro-growth benefits of deregulation, but let’s also redouble our efforts to sell conservatism in a way that appeals to all strands of American society.  We must develop innovative policy solutions to address, as Senator Lee has described it, the tripartite “opportunity deficit” afflicting American society: the immobility crisis among the poor, the insecurity crisis of the middle class, and the crisis of cronyism among the societal elite.  This is what GOP fiscal policy must address, and the Sam Brownback approach is no longer the best way to go about doing that.  Some variation of the emerging fusion of “reform conservatism” and “free-market populism,” by contrast, may well be — at both the federal and state levels.

There is undeniably one other, much simpler, element to the Sam Brownback fallout in Kansas: the RINO revenge.  Indeed, the purge of moderate Republicans in Kansas has come back to hurt Brownback’s polling.  But conservatives would be remiss if we failed to also consider the bigger picture of what Sam Brownback’s Sunflower State reelection struggle (in addition to similar examples like Bobby Jindal’s post-tax reform nosedive in Louisiana approval ratings) represents.  We can either focus on RINO bashing, or we can adapt our conservatism to meet the substantive economic challenges of our time.  The former might be more immediately satisfying, but I would rather focus on the latter.  I hope that on stage in the 2016 GOP presidential debates, we hear more of this sort of discussion and less of “how low can you go?”-style marginal income tax rate slashing.

In the meantime, you can donate here to help save Sam Brownback’s governorship.

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