Conservatism, taxes and the defense of inequality

As Ezra Klein points out today, GOP leadership in Congress continues to stubbornly resist tax increases as a legitimate part of any bi-partisan deficit reduction package.  "President Obama needs to decide between his goal of raising taxes, or a bipartisan plan to address our deficit," said Senators McConnell and Kyl in a joint statement. 


One wonder where all of this will wind up.  The GOP appears to be wrong on both the politics and policy. Polls consistently show that most Americans accept that any deficit reduction package will have to include cuts and revenue increases -- with the overwhelmingly majority of them favoring increased taxes on the wealthy.  It is hard not to think that the GOP's baseline position is defined not by fiscal austerity or a philosophical commitment to small government, but by opposition to wealth redistribution and the desire to protect the economics interests of the privileged.  


In a must read article in Democracy, Jonathan Chait dug deeply into the 'taxophobia' that seems to uniquely define American conservatism in this historical moment.  The conservative movement's 

embrace of taxophobia is probably the most important development in American political life over the last three decades. It is the one quality that most distinguishes American conservative elites from conservative elites in other countries. They’re more likely to question climate science, more sanguine about people dying for lack of health insurance, and less xenophobic (which is rather nice). But above all—far above all—they hate taxes.

Political science research indicates that this taxophobia has been the prime driver of the growing partisanship on economic and redistribution issues among our political elites.  More profoundly, Chait argues, conservative taxophobia has redefined the terms of the political debate.  Democrats are the new fiscal conservatives, while the old fiscal (Keynesian) liberalism stands at the fringes of our economic discourse.  Despite three decades of evidence contradicting supply-side economics, its hold on the Republican Party has only strengthened.


Chait again:

The Republican Party inhabits an otherworldly new realm that even the staunchest right-wingers of a generation before could scarcely have imagined. As the two parties trade power back and forth, the ideological basis for economic policy ping-pongs between the old right and a loopy kind of far-right. Periods of Republican governance have grown increasingly disastrous, while periods of Democratic governance are largely consumed with staving off fiscal collapse.

Clearly taxophobia in the GOP persists despite the empirical evidence.  Outside the rarified air of the Republican leadership, there is little questioning of the role that tax cuts have played in getting us to this point.  As Lori Montgomery wrote when analyzing the component parts of our shift from surpluses to deficits, "the biggest culprit, by far, has been an erosion of tax revenue triggered largely by two recessions and multiple rounds of tax cuts. Together, the economy and the tax bills enacted under former president George W. Bush, and to a lesser extent by President Obama, wiped out $6.3 trillion in anticipated revenue."  Simply letting the Bush tax cuts expire on schedule (or paying for any portions that policymakers decide to extend) would stabilize the debt-to-GDP ratio for the next decade.  The Center for Budget and Policy Priorities provides us with this useful chart:

 


Clearly, there is a political and ideological commitment to taxophobia in today's GOP, quite distinct from whether there is any evidence for its effectiveness as policy -- indeed, policy may very be irrelevant.  It is hard for anyone with even a basic knowledge of the economic history of the US in the past 3 decades to maintain -- as the GOP does today -- that tax cuts will both generate revenue and put a cap on government expenditures.  So why the taxophobia?  Other than in the early 80s, perhaps, one cannot argue that pure vote pandering is the cause, particularly because the sorts of tax cuts the Republicans have consistently favored (and enacted) have been heavily skewed toward the top of the income ladder. 



Chait concludes that "moral disgust at income redistribution" is the best explanation.  Conservatives (particularly those on Wall Street and within the Beltway) believe that progressive taxation is an immoral form of discrimination against the wealthy, who (they argue) are the true drivers of innovation, economic growth, and job creation.  It was for this reason that the GOP was willing to go to the wall politically to extend all the Bush tax cuts late last year (though Obama saved them from having to do so), and why they consistently favor flattening the tax code.


The American conservative movement, at least in its elite variant, has thus returned to the very essence of Western conservative ideology prior to the 20th century:  the defense of 'natural' inequality.  Prior to the rise of modern corporate capitalism, what conservatives defended was the 'traditional' order.  Whether the defense was religious, moral, evolutionary or self-interested, conservatism generally believed that social and economic inequality were immutable and justifiable.  Its roots in monarchism and feudalism, in other words, were clearly stated.  Within the South, they were stated without apology.


Outside the South, at least, this defense of inequality has rested very uncomfortably within American conservatism, particularly in the post-World War II era.  While the movement has always retained (and played to) some of its more cranky elements -- racism, xenophobia, and more recently homophobia -- it has generally tried to avoid rhetorical defenses of inequality, particularly in the economic sphere.  Race is the obvious exception here; following in the path blazed by George Wallace, conservatism adopted a kind of populist appeal to a white herrenvolk.  With a nod and wink to white voters about the sources of racial inequality, conservatives posited a coalition of the black poor and the liberal elite striving to keep the average (white) man down.  With the tax revolts of the 70s and the dawning of the Age of Reagan, the GOP began to attach these sentiments to policy.  It claimed that liberating the pocketbooks of the wealthy would lift from the bottom.


In the wake of the Great Recession, as well as three decades of wage stagnation and economic insecurity for most American households, most voters aren't terribly inclined to cut Roark his Randian lebensraum.  In response, conservative elites seem to be reverting to their fundamental baseline:  the defense of inequality.


The Party of Lincoln (at least at the top) is rapidly becoming the Party of Alexander Hamilton, George Fitzhugh, and William Graham Sumner.  And Howard Roark.