Thursday, October 16, 2008

The thing about low taxes

McCain and the Republican party have talked about taxes and spending, but I don't think they have been framing the debate very well. McCain has talked about how Obama will raise taxes and how McCain will lower taxes, and of course the former thing is evil and the latter is good. I think what he and many Republicans have failed to do is to really get to the essence of why this is a good thing.

Democrats and swing voters are well aware that no one really likes to pay higher taxes, Biden's comments to the contrary.

First of all, I like the idea of lower taxes for other people making more money than myself because I think higher taxes for others affect me indirectly. I don't want to go too much into detail into the theory what more liberal people dismiss as "trickle-down" economics, but I sincerely believe that higher taxes on the rich can affect productivity, and therefore job creation for myself and for my children. Now, this argument can be taken to the extreme. Of course if we tax the rich .5%, we won't get very much tax revenue, but the same goes when we tax at 99.5%, simply because productivity would grind to a halt. So, there is an optimal point somewhere in between, and I tend to think it may be in the teens.

Secondly, though, is that I believe that the tax rate and amount of spending is a representation of how we view the role of government. If we believe in lower taxes and less spending, both in overall amount and where it goes, of course we believe that government should have a limited role.

Unfortunately, McCain and Republicans running for office in Colorado focus on the lower taxes and less spending, but they don't focus on why this is so important. As far as average voter knows, they are in the pockets of the rich people. They have focused on my first point, the productivity argument, but not so much on the idea of why limited government is a good thing. McCain did touch a little bit on this in the final debate concerning health care, but he hasn't focused on the overall principles of limited government that resonate with more voters than we realize. It seemed like Reagan did focus on this. Even though Reagan supported a sizable military, he still talked about the idea of the government leaving people alone and believing in the sweat and ingenuity of the average American person. McCain, however, is just focusing on the possible results of this, which are lower taxes and less spending, not the higher principles behind them.

Hopefully, this likely election loss for the Republican Party will help them rediscover and effectively communicate the ideals of a government that does less. Instead of pushing for lite government, they are currently pushing for Obama-lite government.

4 comments:

Dan Trabue said...

Unfortunately, McCain and Republicans running for office in Colorado focus on the lower taxes and less spending, but they don't focus on why this is so important.

You may be right. I think, though, that what they have also failed to do is explain why we should believe that they are the party of less spending. The last three republican administrations have been the party of less taxing but MORE spending and the people recognize that this is a recipe for failure.

The Dems have effectively shown that they believe in striving for reasonable spending and enough taxation to pay for that spending. I'd suggest that most people recognize that there is a certain amount of gov't spending that is necessary and the people aren't convinced that the Republicans will work to find that effective amount of spending, but rather, they'll advocate cutting taxes while they spend more money.

I think the people do believe in progressive taxation - that those who benefit most from our economic system ought to pay the most back into the necessary parts of the system.

Now, I think where Republicans could make progress would be if they really began to effectively express a desire to cut silly superfluous wasteful spending. Very few are supportive of wasteful spending. But when they sound like cutting programs they don't like while increasing programs they do like - regardless of whether it is wise to cut those programs - THAT is where the Republicans are in a losing position.

Chance said...

what they have also failed to do is explain why we should believe that they are the party of less spending.

True enough. The GOP has not been the party of less spending under Bush. And tax cuts, whether or not they are good for the immediate economy, doesn't go that well with spending increases. Right now, it seems both parties spend the same, one just cuts taxes. I would be optimistic that McCain would be different - at least domestically - however, but maybe that optimism is misplaced.

Dan Trabue said...

This was what I was pointing to: One thing he would need to do would be to convince the People that he truly was a change from Bush/Bush/Reagan, in regards to spending. I would say that he has failed to do so.

Now, in McCain's defense, at least he does have in his favor a history of being fairly consistently small gov't.

But the other side he would have to address is that he is not merely in favor of cutting programs for cutting programs' sake. Some programs, the American people believe in varying degrees, are GOOD programs. They are investments so that we don't have to spend more later.

For example - as I have pointed to in the past - spending SOME money on prisoner education and reform can SAVE gov't money in the long run. That would be an example of what Obama calls an investment in smart gov't, not merely providing a program for the fun of it.

These two points would be things that Republicans (or Dems) would need to address if they want to make their case in a way that wins people over.

Josh said...

I know it's been a while. It's good to see you're still blogging.

Have a good weekend.