Politics & Policy

Taxing Times For Democrats

IRS-love won't play well in South Carolina.

I wasn’t surprised to get a campaign e-mail announcing that Republican Senate candidate Jim DeMint wants to completely eliminate the IRS. It’s the kind of campaign issue Republicans often talk about, particularly in a conservative state like South Carolina.

No, what surprised me was getting this e-mail from his Democratic opponent.

South Carolina Superintendent of Education Inez Tenenbaum, hoping to replace retiring fellow Democrat Fritz Hollings, has seized upon Congressman DeMint’s idea to replace the federal income tax with a national sales tax as the silver bullet in this campaign. She’s made speeches attacking it, written editorials against it (even quoting Bruce Bartlett’s analysis for NRO), and the two candidates have agreed to a series of debates specifically on the topic of tax reform and DeMint’s national-sales-tax idea.

On one hand, it’s refreshing in the current political climate to hear two candidates debating a serious issue like tax reform. On the other hand, what the heck are the Democrats thinking when they make defending the federal income tax a central part of their campaign? It’s almost as dumb as a presidential candidate who spent the early ’70s trashing our military as a Jane Fonda peacenik basing his entire campaign on Vietnam.

Who would be foolish enough to do that?

Tenenbaum is trying to debate the income tax vs. sales tax issue on its merits. There are many conservatives and Republicans who would agree that, from an economic-policy standpoint, the national sales tax is probably a mistake. The sales-tax rate would have to be very high–perhaps as much as 100 percent–to raise as much money as the current income tax, and making the shift to a sales tax could have disastrous results for American businesses.

But these aren’t the economic consequences Tenenbaum is concerned about. Instead, she’s engaging in classic class warfare, complaining that a national sales tax would harm the “middle class,” as opposed to those bad rich people who ought to be paying all the taxes.

For the Tenenbaum campaign, life in the United States without a federal tax auditor screening our paychecks is too horrible to imagine: “DeMint’s proposal would dramatically increase costs for all consumer goods and services–homes, rent, cars, food, clothing, even health care and government services like public education.” DeMint supporters might argue that, when the feds confiscate 30 percent of our incomes right out of our checks, they’ve already taxed our “homes, rent, cars, food, clothing,” comic books, cable TV, and everything else we might have purchased if the IRS hadn’t already taken our money.

But dealing with specifics like these is precisely the mistake that South Carolina Democrats are making. The more she argues against eliminating the IRS and the more she defends the current tax code, the more Tenenbaum sounds like a typical liberal Democrat. Or, as they’re called in South Carolina: “losers.”

To win statewide in a GOP stronghold like South Carolina, a Democrat must a) have a Republican opponent with a problem and b) not be perceived as a typical member of the Democratic party. Congressman Jim DeMint became the nominee by winning a GOP primary and runoff over formidable opponents (including former GOP governor David Beasley), and his negatives in the polls are extremely low. No problem there.

As for Tenenbaum, she has wisely highlighted her support for the death penalty and her opposition to same-sex marriage. It sets her up as the “independent-minded Democrat,” as her supporters like to call her.

But defending the current tax code with class-warfare rhetoric about taxing the rich doesn’t sound “independent-minded” at all. It sounds like talking points straight from the Democratic National Committee. Tenenbaum recently said she would “make permanent some of the Bush tax cuts” [emphasis added], a clear indication that she wants to raise tax rates on somebody. That “somebody” is most likely the 50 percent of the population who already pay about 96 percent of the federal tax bill.

In fact, the Tax Foundation reports that, since the Bush tax cuts were put in place, the number of tax filers who will pay no federal income tax is now a record-setting 44 million. And while Democrats keep talking about Bush’s “tax cuts for the rich,” the share of Americans who have to file income taxes but either pay nothing or get a handout (the Earned Income Tax Credit) has jumped from 23 percent in 2000 to an estimated 33 percent in 2004.

Turning the idea of “economic justice” on its head, Tenenbaum insists that the people who pay little or nothing in federal income taxes should pay even less, while the 20 percent of taxpayers who pay 80 percent of all taxes should pay even more. She estimates that about a third of South Carolinians would pay more in net taxes under the DeMint plan, which merely indicates that they currently pay nothing at all.

So far, however, class warfare isn’t working in South Carolina. The latest Survey USA poll put DeMint ahead of Tenenbaum 52-39 percent. The even better news is that Congressman DeMint is not sitting on his lead. He’s campaigning on tax-reform ideas in the kind of fundamental and open way that, whether you like his sales-tax plan or not (I don’t), will at least help us get closer to meaningful change.

Meanwhile, Inez Tenenbaum continues to defend the current system. She thinks having the IRS on her side is a good thing.

Mark down South Carolina as a “GOP pick-up” in November.

Radio-talk host Michael Graham covers southern politics from his home in Virginia. He is an NRO contributor.

Michael GrahamMichael Graham was born in Los Angeles and raised in South Carolina. A graduate of Oral Roberts University, he worked as a stand-up comedian before beginning his political career as ...


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