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Bush’s Walk On The Supply-Side


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Larry Kudlow

Rather than lapsing into get-out-the-vote platitudes, George W. Bush continues to hammer home his message of tax cuts and economic growth on the campaign trail in Michigan.

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A more confident Bush, displaying both rhetorical strength and substance, spoke eloquently at a midday rally at Michigan State University Monday on the importance of traditional family values and economic growth: “If there’s any excess money in Washington, it’s not the government’s money, it’s the people’s money.” Bush emphasized the job-creating role of entrepreneurship. “What’s risky,” he told the cheering crowd, “is leaving the surpluses in Washington. Tax cuts aren’t risky.” Bush asserted that everyone should get a tax cut. He noted that the U.S. now has the highest tax burden since World War II, and argued that “at some point, this will affect the economy.”

Bush articulated a Reaganesque optimistic vision of economic growth, and he contrasted his plan of across-the-board marginal tax-rate cuts with a “Washington-style targeted tax-cut approach,” thereby drawing a clear distinction between his tax policy and those of both President Clinton and Senator John McCain. Bush also reiterated his theme of compassionate conservatism, by pointing out that single moms have the toughest job in America. “For those who live on the outskirts of poverty,” he said, “if they succeed in their first job and get a raise, they will pay a higher marginal tax rate than someone making $200,000 per year.” This is a very important point. Successful workers who move from the 15% tax bracket to the 28% bracket — and of course, must also pay the 15% Social Security/Medicare payroll tax — will pay 43% on extra dollars earned. This penalizes them and puts them above the 40% top rate on the highest income earners.

This is a powerful tax message. In direct opposition to McCain, Bush insisted that EVERYONE should get lower taxes. His plan would knock the top personal rate from 40% to 33%, but it would also take the lowest rate to 10% from 15%. A Bush administration, one hopes, would move toward even flatter tax-rate reform, but in the current political environment, Bush’s plan is a strong one, much better than McCain’s. So is Bush’s final message in Lansing, Michigan that he will “knock down the middle-class tollbooth to success.”

By appealing to across-the-board tax-cut fairness, Bush is generating a truly broad-based economic message. It is a reformer’s message, and it is anti-Washington. John McCain is increasingly resorting to a Bob Dole-style message of victimization and self-pity in his huffy objection to Bush’s criticisms of him. But Bush is not running a negative campaign of fear, no matter how many times McCain says so. Bush is promoting an upbeat, optimistic, pro-growth economic message — just listen to what he’s saying. McCain, in contrast, isn’t talking substance at all, emphasizing his cult of personality — still calling himself Luke Skywalker — rather than a clear issues message. This is exactly the mistake he made in South Carolina. It’s not likely to bring out the kind of Democratic turnout on which opponents of George Bush and John Engler are banking.

The Michigan polls are too close to call, but Luke Skywalker is not on the ballot Tuesday. A resurgent George W. Bush is. If the Texas governor stays on message in the next 24 hours I believe he wins the primary, and the nomination.



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