David Koch Republicans

by Reihan Salam

Do you support same-sex civil marriage and reducing defense expenditures? Do you think that tax increases should be part of the effort to address America’s long-term fiscal imbalances in addition to deep spending reductions? You might be a David Koch Republican, per Kenneth Vogel’s recent interview with the somewhat reclusive billionaire philanthropist. 

I’d like to add a few thoughts on this theme. 

You might be aware of the fact that David Koch is a wealthy man who earns a very high income. One of the chief accusations against Koch has been that his political activism represents a form of “income defense” and “wealth defense,” i.e., that he engages in politics to enrich the firms in which he holds an ownership stake and to shield his income and wealth from taxation. Koch’s explicit support for higher taxes complicates this notion, as does the fact that he has devoted considerable resources to promoting same-sex civil marriage and the protection of civil liberties. To be sure, Koch Industries is heavily involved in oil and gas extraction, and David and Charles Koch have been staunchly critical of efforts to tax and regulate carbon emissions and to limit the exploitation of domestic carbon-rich energy resources. But of course this is a cause championed by many on the political right, particularly those living in regions that either currently engage in oil and gas extraction or that might in the near future due to technological innovations that have made shale gas and shale oil reserves more accessible than ever.

So what might explain Koch’s (presumably reluctant) embrace of tax increase? He seems to be one of the libertarians persuaded by William Niskanen’s critique of “starve-the-beast.” Briefly, Niskanen argued that (1) it was implausible that reducing the “price” of government would reduce demand for government; (2) the evidence of the post-Reagan era was that tax reductions tended to be accompanied by a lack of spending restraint while tax increases tended to be accompanied by an embrace of spending restraint; and (3) a fixation on cutting taxes had distracted the libertarian and conservative movements from pursuing reforms designed to curb the growth of public expenditures. One might reject Niskanen’s thesis, but it has certainly gained currency among at least some elite libertarians and conservatives.

This raises an intriguing possibility. What if David Koch’s high levels of political spending are the only way to protect a Republican president who decides to accept modest tax increases as part of a “grand bargain”? The conventional critique of billionaire-funded Super PACs is that they advance the narrow “income defense” and “wealth defense” interests of the superrich. Yet it is also true that the superrich are often less tax-sensitive than politically-engaged upper-middle-income voters, and so a politician who relies more heavily on tax-insensitive rich donors than on tax-sensitive HENRYs (Shawn Tully’s clever term for “high-earners, not rich yet”) might be more likely to back tax increases. One sufficiently committed or, if you prefer, zealous Koch brother can balance a very large number of doctors and lawyers and small-scale entrepreneurs.

Imagine if George H.W. Bush and his budget director Richard Darman had a billionaire-backed Super PAC at their disposal that could wage an air war on their behalf. They might have deterred Ross Perot’s quixotic presidential campaign and overmatched grassroots opposition within the GOP. The political history of the past twenty might have been quite different. This outcome was hardly inevitable, but it is a counterfactual worth contemplating — and incredibly, it is one that doesn’t seem to have occurred to the more ingenuous critics of lightly-regulated campaign expenditures.