A New Direction on Tax Policy?
by Matt Lewis, 11/2/2006
Today's Washington Post profiles a House race in Connecticut where the Republican incumbent, Rep. Nancy L. Johnson, is hitching her candidacy to tax cuts. Problem is, nobody seems to care.
A 24-year incumbent from Connecticut who sits on the tax-writing House Ways and Means Committee, Johnson has run at least three television ads on fees and taxes, accusing her Democratic challenger, Chris Murphy, of raising "our taxes 27 times." She presses the point in speeches, telling voters that while Murphy was hiking taxes as a state lawmaker in Hartford, she was helping President Bush cut taxes on Capitol Hill.
But it's not clear the tax boat is going to float in this western Connecticut district, where Johnson, like Republicans nationally, is having trouble turning the economy into a winning issue. Murphy, 33, a lawyer and state senator, has opened a narrow margin in the polls by painting Johnson as a pawn of big business and attacking administration policies -- including the tax cuts -- as giveaways to millionaires.
To the extent that this is happening nationally, this election could be a significant test of how effective tax cuts continue to be as a campaign issue. Not only are candidates running on them, but tax cuts have been President Bush's signature domestic policy. Republicans have made cutting taxes generally their highest-profile fiscal policy for better than 20 years. But could it be the public is losing interest in them? Has the conservative fiscal policy program of "any tax cut anytime" lost its resonance with the American public?
Recently, neither tax cuts nor productivity gains have produced broadly-shared prosperity. The false promise of productivity gains, in particular, is causing many prominent thinkers inside the Beltway to reexamine some assumptions embedded in recent economic policy. Yet it may be that regular Americans are ahead of the curve — having long ago grown tired of the same old policies. The question then is, which alternatives are people ready for?
Democrats of late have been making hay out of proposals to clean up taxes on businesses and the well-heeled. But there may be a more profound shift happening in the American electorate that politicians, both Democrats and Republicans, will have to respond to.
