Let’s Make A Liberal Tax Pledge

He's on the downswing, but remains monstrously powerful because of his simple pledge

He’s on the downswing, but remains monstrously powerful because of his simple pledge

Maybe not a pledge — because I think we all find the inflexibility of Grover Norquist’s anti-tax pledge to be its most destructive quality — but we can create something more refined than the status quo vague commitment to “taxing the wealthy/protecting the middle class.” But a serious commitment to a variable tax plan to fit defined benchmarks can assist voters in setting tangible expectations for what a Democratic tax policy actually means.

While there is public support for the “protect the middle class while asking the wealthy to pay a little more” pitch, it suffers from two defects that will bite Democrats in the ass sooner or later.

First, it’s too easily undermined by Republican campaign teams. I mean, what is the middle class? Right or wrong, Republicans can implicitly counter-define the term and blast Democrats for targeted tax increases. Also, doesn’t the payroll tax hike hurt exclusively the middle class?. Of course it does, because the idiotic cap on income subject to the payroll tax means anyone making over $113,700/year pays a lower rate than everyone else. Someday a Republican will effectively exploit these weaknesses.

Second, the current mantra lacks an element of long-term vision. The fiscal cliff negotiations just rendered the Bush tax cuts permanent for most Americans. Those deficit-exploding tax rates are the new baseline for tax policy permanently (meaning “until someone changes it”) and Republicans can — only half-disingenuously — claim that spending cuts are now the only remaining tool for closing the deficit. But politicians are derided for, among other things, their commitment to political expediency. A vision based on long-term planning appeals to most Americans and Republicans have cornered this market for too long by turning absurd proposals like the “flat tax” into something that Americans can understand as the long-term policy commitment of Republicans.

So what should the alternative plan entail? First, it should maintain the general spirit of protecting the poor and middle class and progressive taxation for both moral reasons and to prevent accusations of “flip-flopping.” Second, it should include a deficit-reduction component. Deficits aren’t universally bad, but Americans have learned to fear deficits and Democrats need to capitalize on this concern with a program that addresses long-term deficits without crippling short-term flexibility.

My proposal is this: Democrats commit that they will, as much as practicable, maintain the current tax rates when annual GDP grows at 2% to 2.5%. If growth slows, rates will be cut accordingly (with progressive adjustments) to provide stimulus and if the economy grows, taxes will be increased accordingly to reap a dividend to reduce the deficit (with progressive adjustments). This can be given the “bumper sticker” treatment by PR folks with more experience in that field.

This is certainly a first draft. Perhaps the benchmark for economic health should be by average wages by tax bracket. Or perhaps this whole package should be adjusted by pushing for more upper-income brackets. There’s a lot of room to adjust, but this “pledge” reflects a commitment to the status quo treatment of the middle class vis a vis the wealthy and offers a long-term vision for deficit reduction by generating more income during economic upswings.

Would it bring in enough revenue to “solve” the deficit? Probably not, but it is a better policy plan than setting the current rates in stone and it’s something voters could actually get behind.

4 comments for “Let’s Make A Liberal Tax Pledge

  1. Doug DeMoss
    January 3, 2013 at 12:07 pm

    Nice article, but I think you’re wrong about the Republicans ever using the “idiotic cap” on payroll taxes. From their perspective, that’s a feature, not a bug, and they wouldn’t dream of giving Democrats “credit” for it.

    • January 3, 2013 at 1:19 pm

      That’s probably right, but even if the GOP supports that feature, don’t underestimate the power of calling your opponent a hypocrite.

  2. erik
    January 3, 2013 at 12:23 pm

    I don’t think pledges on the tax side are particularly effective in the current tax regime. that is, marginal tax rates are not an accurate indicator of what one actually pays due to deductions and other one-offs. if the democrats wanted to make head way, they should probably do something with entitlements in establishing a baseline for defense- this would gain a lot more votes than trying to engage in the policy kabuki known as tax policy.

    • January 3, 2013 at 1:25 pm

      I think you’re right that tax rates aren’t the “be all end all” of fiscal policy, but they have a symbolic hold over average Americans.

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