8/25/00 3:00 p.m.
Lazio Targets the New Investor Class
His new tax-cut plan for New York is — oooooh! — risky, savvy, and very shrewd.

Joel C. Rosenberg is president of November Communications, Inc.

orget Rhode Island's Richard Hatch and America's hottest game show, Survivor. This week's savviest moves were made by New York's Rick Lazio, in a political war game with real-world consequences.

Rick who? A few short months ago, few New Yorkers — and far fewer outside of New York — had ever heard of the congressman from Long Island. Lazio stepped into the Senate race last spring after New York City mayor Rudy Giuliani stepped out. At the time, Lazio was about 18 points behind Hillary Rodham Clinton in the polls. Today he's climbed into the lead, and he just may win.

Why? Because he's not Hillary Rodham Clinton. He's nice. He's friendly. He's honest. He's clean. And he's a compassionate conservative — sensible, sedate, sober. So far, so good.

Now he's making his move, and — oooooh! — it's risky, smart, and very shrewd.

The rap on Lazio thus far has been that he's a nice guy but in over his head, unwilling to make the tough choices really necessary to win. Sorry, Charlie, the rap is wrong. Rather than keep his head down and keep all of New York's attention fixed on the First Lady of Controversy, Lazio showed real and unexpected political moxie yesterday. He opened a dramatic new front that promises to make the country's hottest Senate race ten times hotter.

In a speech to a Chamber of Commerce audience in Amherst, N.Y., Lazio unveiled a sweeping tax-cut plan. He pledged to return part of the federal budget surplus to overtaxed working families and jump-start the sluggish upstate New York economy in regions such as Buffalo, Rochester, and Syracuse.

The Lazio plan would:

* save the average New Yorker $1,200 a year, and the average New York family $3,000 a year

* allow taxpayers to deduct their payroll tax payments

* end the marriage tax penalty *abolish the "death" tax (also known as inheritance or estate taxes, with a top rate of 55%)

* slash the capital-gains tax rate to 15 percent from 20 percent

* expand the IRA contribution limit to $5,000, instead of just $2,000 a year

* allow parents to set aside $500 a year tax-free for their children's education

* repeal the 1993 tax hike on Social Security benefits.

Is it the flat tax? No. But it's gutsy — especially in New York, especially in a race where Lazio is ahead.

The payroll-tax deduction is particularly shrewd. Seventy percent of American workers actually pay more in payroll taxes than they do in income taxes. So that's real tax relief for working families who need it.

Gutsiest of all, though, is Lazio's move to cut the capital-gains tax rate to help spur investment in new, fast-growth companies and new, high-paying jobs. Even George W. Bush has so far refused to propose a capital-gains tax cut. So why is Lazio doing so? Is he crazy? Doesn't he know Hillary will attack him for trying to cut taxes for the rich? Indeed, she already has. Her campaign immediately attacked Lazio's plan as a risky tax "scheme."

Sure, Lazio knows — he just doesn't care. He supported the capital-gains tax cut in 1997 that brought the rate down to 20 percent from 28 percent. And he saw President Clinton sign it. And he knows it worked — boosting the overall national economy and bringing in even more government revenues. And he knows more of the same will do even more good. So he's assuring advisers and supporters that he will press his tax-cut offensive all across the state of New York to a dramatic upset victory over Mrs. Clinton in November.

The new Lazio tax-cut plan represents the strong influence of Bill Dal Col, whom Lazio hired this summer to be his campaign manager. Lazio and Dal Col have been quietly working under the radar over the past two months with policy and message folks in New York and Washington to develop a fall policy agenda (full disclosure: I've been one of them). The objective: to connect Lazio with blue-collar families upstate, and New Investor Class voters throughout the state. Dal Col understands New Yorkers and the New Investor Class better than most strategists in either party. He grew up on Long Island, and has known Lazio most of his life. He graduated from Cornell University and helped run the Reagan-Bush campaign in New York in 1984. He was presidential campaign manager and strategist for tax-cut advocate Steve Forbes in 1996 and 2000. He once ran Americans for Hope, Growth and Opportunity and Empower America, two pro-tax-cut grassroots organizations. He was also once chief of staff for Jack Kemp, another tax-cut leader and former Buffalo-area congressman. Dal Col believes that Lazio has do to more than "not be Hillary." He believes Lazio has to give voters positive reasons to vote for him, not just against her — and he's right. Better yet, he's helped Lazio develop not just a policy but a way of presenting the policy that Lazio is comfortable with and that will resonate with New Yorkers.

The New York Times reports today that Lazio has "intentionally kept a low profile" thus far "in order to raise money and to give himself time to become acquainted with issues, and in the belief that he benefited from keeping attention off himself and on Mrs. Clinton." True, and smart. The Times also notes that "with Labor Day, the traditional start of the general election campaign, less than 10 days away, Mr. Lazio is moving into a new, higher-profile phase of his campaign; today's speech was the first in what aides said would be a series of addresses intended to flesh out his political portrait." Also true, and also smart. Social Security and health care are other big issues Lazio wants to tackle, as well as his personal passion for waging a winning war on cancer. Stay tuned.

So what will Hillary do now? Can she afford to be seen as against cutting taxes for hardworking New York families, especially when she's never paid taxes in New York herself? She will undoubtedly go negative. She already has, in one scathing TV and radio ad after another this summer. So far, it has all backfired. Lazio has gained ground, and confidence. On November 7th, the tribal council of New York will decide Hillary Rodham Clinton's fate. Will she survive? Don't bet on it. It's a jungle out there, especially for those in unfamiliar territory.