Taxing Times, and That Ol’-Timey Liberal Religion

I was on the road all this past week with a hectic itinerary on both coasts, so I wasn’t paying especially close attention to the news. Did I miss anything?

Ah yes—I see Democrats are in a rage that Republicans have taken Nancy Pelosi’s advice to pass a bill to find out what is in it with the tax reform bill. They’re acting as though Republicans, in wheeling and dealing to get enough votes by making last minute changes to the bill on the Senate floor, did something unprecedented. Senators who held up printed pages showing handwritten changes in the margin, apparently forgot the common sense meaning of the term “markup session.” Who cares if it is done in the Senate chamber rather a committee room?

From the Democrats’ braying about how this tax bill represents “the end of America” (Kurt Eichenwald), you’d think something unprecedented had occurred. This only shows what short memories people have. There is nothing being said right now that liberals didn’t scream about Reagan’s budget and tax cuts in 1981—including the often chaotic process and grubby deal making to round up votes that we used to call “politics.” I note one especially memorable detail of the 1981 budget bill in chapter 4 of my Age of Reagan:

One measure of the haste and frenzy of the backroom dealing was when a staff person’s name and telephone number (Rita Seymour, 255-4844) was scribbled on the margins of a list of budget items and ended up being mistakenly printed in the final legislation that went on the books.

I wish some Republican senator had had the wit to insert Elizabeth Warren’s phone number into the bill, just for grins and giggles.

But see if these passages, also drawn from my chapter 4, don’t sound familiar:

Unaccustomed to losing, the Democratic leadership in the House began to lash out in frustration, complaining that Reagan was dominating Congress. Rep. Richard Bolling, the chairman of the House Rules Committee, said that “This is incipient tyranny, a popular president is attempting to tyrannize a whole Congress, a whole people.” Majority leader Jim Wright complained, “I don’t know what it will take to satisfy them, I guess for Congress to resign and give them our voting proxy cards.”

In fact, since Democrats are recycling all of their old clichés from the 1980s, I may as well recycle my recounting an analysis here, too, because not much has changed:

Liberal rhetoric on the issue is revealing. Allowing people to keep more of their own money was called “showering money on the rich,” as though all wealth belonged to the government rather than the people. If not outright egalitarianism, the Democratic attitude is at least rooted in a distributionist fallacy—the idea that wealth is distributed, mostly by government, rather than earned by individuals and apportioned by markets. Even if liberalism appealed not to redistributionism but to a theory of the social contract under which the wealthy have an obligation to the state, there has never been much of a concrete explication of what the practical limits are. Conservatives never liked the progressivity of the income tax, and pointed out that the top 5 percent of incomes in the U.S. paid about half of all income taxes. Was this fair?

It was inevitable that this argument would arouse the fiercest partisan passions because the issue of fairness in American politics is ultimately an argument about political justice. The bland political economy texts of our time portray it as a clash between equality and liberty, but this merely reveals how much American political thought has decayed since the time of the founders. Political thinkers like James Madison understood that a regime of equal rights must recognize unequal outcomes. The logic of modern liberalism rejects this older understanding of equality and is unsatisfied even with the idea of equal opportunity. The entitlement mentality of liberalism embraces, in principle if not always in practice, that the redistributionist premise of egalitarianism take precedence over wealth creation. It is revealing that liberals will never name a specific income tax rate that constitutes the limits of “fairness.” The liberal attitude toward “the rich” is always that they should pay “more.”

The major news media were overwhelmingly sympathetic to the liberal viewpoint about “fairness,” and acted as a megaphone for the Democratic onslaught about the “unfairness” of Reagan’s tax cut plan. The Washington Post’s Haynes Johnson offered a typical formula: “Stripped of slogans and magic economic curves, supply-side theorems were nothing more than the old selfishness dressed up in new garb for the 1980s. . . [A]cquisition of wealth had been given a moral rationale.” Read the last clause of that sentence twice: the clear implication is that acquiring wealth is morally dubious. Editors in newsrooms repeatedly let this kind of phrase pass as “reporting” or “news analysis” without so much as a hiccup. More often the leading refrain, even in news stories, was that Reagan’s budget plans were “unfair” to the poor and minorities. “The impact of the Reagan cuts on minority groups is likely to be severe,” the Washington Post reported in a front-page news story. Even the Soviet Union joined the attack on Reagan’s economic policy. Georgi Arbatov told the New York Times that Reagan’s policies were an attempt “to cure the entrenched economic ills of the late 20th century simply by returning to the ‘good old practices’ of 19th-century capitalism.” Few noticed the irony that the major American news outlets took the same editorial line about Reaganomics as the Soviet Union.

Then there were the dire predictions of a “long hot summer,” that cuts in social programs would spark a revival of 1960s-style urban rioting and racial unrest. Riots in Britain in the summer of 1981 spread to 17 cities, including unlikely burghs such as Dundee, Scotland, in what was widely seen as a reaction to Prime Minister Margaret Thatcher’s economic and social policies—policies Reagan was about to emulate. Richard Hatcher, the Democratic mayor of Gary, Indiana, emerged from a White House meeting with Reagan to declare that “There are hundreds of Mount St. Helenses in the streets and alleys of this country. If drastic cuts are made in the programs that go to the heart of the little assistance the disadvantaged receive, I fear for what will result.” New York’s Democratic Governor Hugh Carey echoed this prediction, saying “there will be social upheaval in this country by October because of the Reagan Administration’s budget cuts.” Vernon Jordan, head of the National Urban League, said, “You cannot expect people who are ill housed, ill fed and out of work to act normally.” Columnist Tom Wicker warned, “the Reagan Administration would be prudent to weigh such parallels as there are, with the idea that what’s happening in Britain could presage a recurrence in this country.”

Cue threats of riots in the streets because of Trump and the GOP tax bill in three, two. . . Some things just never seem to change.

I’ll have more on some of the specific wonky aspects of the tax bill in a separate post. Stay tuned. . .