Friendly Advice to the Democrats

Let me offer my Democratic friends some friendly advice: They will never win the presidency or regain control of the Congress by campaigning to raise taxes, tariffs and special-interest subsidies while opposing a foreign policy that seeks to expand liberal democracy in the Middle East and throughout the Muslim world.

Sen. Zell Miller says it best in his new book, A National Party No More: The Conscience of a Conservative Democrat: The current batch of Democratic presidential hopefuls have managed to combine the foreign policy of George McGovern with the tax policies of Walter Mondale, a prescription for disaster for the Democratic Party.

America is a 50/50 nation politically. A Democratic candidate with an ounce of economic sense could become fiercely competitive by putting together a John Kennedy-style economic program based on broad-based economic growth and prosperity for all. The Democrats could devise a 21st century JFK Democratic supply-side economic program without alienating their Democratic base.

The most recent Washington Post-ABC News poll reveals two significant facts. First, four out of 10 Democratic voters are tired of the partisanship and demand that their leaders compromise more with the Bush administration. Second, 42 percent of Democratic respondents want to put a Democrat in the White House so badly that they say they would prefer a nominee who is able to defeat Bush even if the candidate diverges considerably from their position on policy matters. This is a license to go fishing for Republican and Independent voters.

With the right lure and some JFK supply-side bait, the Democratic candidates could net the votes they need by fishing in Republican waters where some of the most ardent supporters of the president’s economic program are also the most skeptical of U.S. foreign policy. The place to start with simplification would be the Alternative Minimum Tax, which is a perfect illustration of how tax policy aimed at the so-called rich always ends up hitting low- and middle-class people the hardest.

The AMT has gotten so perverse that it requires some single taxpayers earning as little as $24,500 to calculate their taxes a second time by a second set of rules if their tax bill calculated under the rules that apply to everyone else is too small. In the second round of tax calculations, the taxpayer is denied legitimate deductions, such as deductions for retirement accounts, state and local taxes, the child tax credit and even indexing that protects against inflation-induced bracket creep. No wonder voters don’t buy the soak-the-rich rhetoric.

The good news for the Republican Party is that the current batch of Democratic candidates will never drop their lines into Republican waters because they remain completely possessed of the same class-envy obsession that has plagued the Democratic Party, with the possible exception of Bill Clinton, for the last two decades. It looks like the Democratic field is irreversibly locked into to a class-warfare political strategy, which has proved repeatedly to be a losing strategy and will doom the Democratic candidate again this time around.

President Bush’s tax cuts are now kicking in to revive economic growth, which came in at 7.2 percent during the third quarter after correcting for inflation. Yet the Democratic presidential hopefuls remain in denial, ranting against the president’s economic program and pledging to repeal his tax cuts, and hence raise taxes, if elected. To a man, they are all protectionists, and not a one of them seems to comprehend that you can’t help the poor by hurting the rich, and you can’t create more jobs by punishing the entrepreneurs and businesses that create the jobs.

The first law of politics is that when you find yourself in a political hole, stop digging. A corollary to that law is to tunnel out of that hole directly under the campaign of your opponent and undermine it. In a recent issue of The Wall Street Journal, Alan Murray described how the Republican Party did exactly that back in the late 1970s, when it turned away from the losing strategy it had been pursuing since the end of World War II, namely increasing taxes to eliminate budget deficits. Republican candidates learned how to popularize the economic ideas of Art Laffer and Columbia University economist Robert Mundell, who later won the Nobel Prize for his efforts, that the way to eliminate deficits was to increase economic growth and generate more revenues, and the way to raise growth was to reduce tax rates on labor and capital across the board.

The reason even modestly paid workers repeatedly support across-the-board tax-rate reductions and resist raising taxes on people with incomes higher than their own is that they hope to increase their own incomes, and they do not want to hit that higher tax wall when their incomes rise. Class envy is a vicarious luxury only rich politicians can afford.

Workers struggling to increase their own income and build a financial future for themselves and their families understand that the government policies that maximize their own welfare are precisely those that make the overall economy grow the fastest. While rich politicians might not be able to figure it out, workers who have to worry about making ends meet understand full well that you can’t produce more and better jobs by penalizing those who create the jobs with high tax rates and onerous regulations.

If the Democratic candidates would listen to the voice of the people, they could rejuvenate their party. That would be good not just for Democrats, but for the nation.