Lessons Learned
Taxpayers can trust Republicans again.

Mr. Moore is president of the Club for Growth
May 30, 2001 1:00 p.m.

ince about 90 percent of the laws passed in Washington harm the economy, rather than help it, it's worth celebrating those rare occasions when Congress actually does something good for America's long-term prosperity. President Bush's tax bill is one of these rare and wonderful policy achievements.

No one has complained more about the defects of the tax bill (too back-end loaded to help the economy anytime soon, too small given the giant tax surpluses we now have, and too much of a concession to the class-warfare rhetoric of the Left) than I have, but this should not blind us to the genuine accomplishment that has been delivered by George W. Bush and the GOP congressional leadership. Why have I laid aside my past reservations to trumpet the Bush tax bill? Here are the top 10 reasons why conservatives should celebrate this bill's passage:

1) When it comes to tax cuts… Size does matter. One of the strongest arguments for the Bush tax cut is that it will take $1.35 trillion over the next 10 years out of Washington. This tax cut is the best conceivable repellent to new spending. This is precisely why the Democrats fought so tenaciously to prevent a tax cut of this magnitude from ever being enacted. Workers, businesses, and parents can spend $1.35 trillion much more efficiently than Congress can.

2) A return to the supply side. As Larry Kudlow argued earlier this week, the tax bill provides some modest, but not inconsequential, increases in supply-side incentives to save, invest, and take risks. Bush wanted to slash the top tax rate to 33%. Instead he settled for 35%. But hear this: The elimination of the phase-out of exemptions and itemized deductions brings the effective top income tax rate down by at least one more percentage point. We didn't repeal the whole Clinton tax hike of '93, but this is a very nice start.

3) Vindication for the politics of tax cuts. Moore's law of politics is that no one in the history of American politics ever lost an election by voting for tax cuts. After months of the media assuring us that Americans don't really feel that tax cuts are a "high priority," every vulnerable Democrat in the Senate voted "aye" on the final passage of the Bush tax cut. Dianne Feinstein voted for tax cuts. So did Jeanne Carnahan of Missouri, who never had a nice word to say about tax cuts in her life. So did Senators Max Cleland, Max Baucus, Mary Landrieu, and Tim Johnson. They must know something about the politics of tax cuts that the folks at CBS and the New York Times can't seem to fathom.

4) The Left is fuming. It finally dawned on me: If this bill is so watered-down, why is it that people like Tom Daschle, Dick Gephardt, Paul Krugman, and the entire staffs of the Washington Post editorial page and the Center for Tax Justice have been whining continuously about how horrible this "ill-advised" tax cut is going to be for the nation? Paul Krugman moaned on NPR recently that this tax bill's price tag is really closer to $2 trillion. Let's hope he's right.

5) The GOP has finally put the 1990 "read-my-lips" debacle behind it. Taxpayers can trust Republicans again. Tax cuts were the crown jewel of the Bush domestic-policy platform. The White House absolutely had to have this win and they got it — notwithstanding several near-death experiences in the Senate. Bravo to Karl Rove, Paul O'Neill, Larry Lindsey, Nick Calio, and the whole White House lobbying team that snared this victory for the president and for the country. The ghosts of Dick Darman have been put to rest.

6) McCain is now certifiably McCrazy. John McCain showed his true colors. He actually voted AGAINST final passage of the Bush tax plan. He was one of only two Republicans in all of Congress to do so. Why this act of Jeffordsonian betrayal? Because he proclaimed that the bill favored the rich too much at the expense of lower-income Americans. He co-sponsored a poison-pill amendment with Tom Daschle to gut the Bush tax plan. McCain's evil plot was foiled, thankfully, by one vote. Prediction: John McCain will never again seriously contend for the GOP nomination for president.

7) Tax-cutting success generates its own momentum. Why not another tax bill next month to cut the capital-gains tax? To give business well-deserved tax breaks? To phase in the tax cuts even faster? To repeal the death tax sooner? The conservatives in the House, including people like Dick Armey and Pat Toomey, are already crafting proposals.

8) Class-warfare rhetoric fell flat. The Left's chief rallying cry against the tax bill for these last three months was "tax cuts for the rich." It didn't play in Peoria. Here's an example: A recent McLaughlin and Associates survey found that 60% of voters said they favored eliminating the death tax even for "billionaires." The lesson: The growth argument of the Right once again trumped the envy argument of the Left. JFK was right: A rising tide does lift all boats.

9) Fire the Joint Tax Committee. The biggest obstacle to tax cuts this year was Lindy Paul, the staff director at the Joint Tax Committee — the committee charged with predicting the revenue losses from tax cuts. Consistently, Paul vastly overstated the "cost" of the tax cuts, even predicting that a capital-gains cut would lose revenues, when history proves conclusively that capital-gains tax cuts always raise revenues. If we want more tax cuts, we need to insist on real-world scoring at the JTC.

10) Want tax cuts? Vote Republican. Republicans win when they draw sharp distinctions with Democrats. On the tax issue, they have done just that. Every Republican in the Congress, save two (Chaffee and the aforementioned Mr. McCain) voted for tax cuts. Meanwhile, the Democratic leadership and all the left-wing interest groups rallied against tax cuts. This sharp distinction on the tax issue can only help the Republican party, which is now genuinely the party of Reagan.

So conservatives should take some Prozac and cheer up. We've just passed the third-largest tax cut since World War II. This might not have been a Reagan-esque accomplishment — but it's awfully close.