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The Agenda

NRO’s domestic-policy blog, by Reihan Salam.

Quick Thought on What Mitt Romney Might Have Learned from Howard Dean



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During Howard Dean’s 2004 presidential campaign, he would occasionally make reference to “the Bush tax hike.” I referenced the idea in 2008 article for National Review:

During the 2004 campaign, Howard Dean blasted Republicans for what he called “the Bush tax hike.” Though your federal income-tax burden might have dipped, Dean argued, you were paying more in state and local taxes and for health care under Bush. So in effect, unless you were very wealthy, you didn’t see any real benefit from the tax cut — or so the argument went. 

Luckily for Republicans, Dean was hardly the perfect messenger. But the idea was potent all the same: When Republicans focus almost exclusively on the federal income-tax burden, they talk past the public. Today’s median-income family of four may be paying less than 6 percent of its earnings in federal income taxes, but health-insurance premiums generally amount to far more than that. And because those higher premiums haven’t produced a higher quality of service, many Americans feel like they’re running in place. That’s how you feel when you’re paying higher taxes for the same unsafe streets and the same unresponsive bureaucracy. It is hardly surprising that Republicans have remained fixated on taxes since 1980: Fighting taxes is far easier than, say, fighting health-care inflation. The trouble is that health-insurance premiums affect households at least as much as taxes do. 

If we think of middle-class prosperity as a bundle of goods, the challenge becomes clearer. Apart from health care, squeezed families are worried about housing, traffic congestion, and, more than 30 years after Butz left office, the price of food. Fortunately, there are pro-market policies that can address all these challenges. To win back the White House, Republicans need to start fighting for them. [Emphasis added] 

Mitt Romney’s reference to Barack Obama’s “economy tax,” and his references to the soaring cost of health insurance and gasoline, were a belated but very shrewd invocation of this Deanian innovation. President Obama often makes references to the various refundable tax credits he created and expanded under the 2009 fiscal stimulus law, and the Obama administration has presided over a large increase in social transfers, as David Armor and Sonia Sousa recently documented in National Affairs. But if we accept the notion that the president is to some degree responsible for the weakness of the recovery — a premise that many of the president’s allies would not accept, it is worth keeping in mind — something like the Dean argument represents a potent counterargument. 



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