Politics & Policy

The Democrats’ Cynical Ploy

First they flip-flop on Romney's tax plan, then they lie about it.

In an opportunistic change of heart — or rhetoric — Democratic leaders like Representative Chris Van Hollen and Senator Kent Conrad have suggested that a tax-reform proposal advanced by Mitt Romney during the presidential campaign may be a critical part of any bargain to address the “fiscal cliff.” That’s right: The same Romney tax plan that President Obama called a “sketchy deal” during the fall campaign has now become the one policy option that might avert disaster.

The only problem is that Democrats aren’t actually considering anything even close to the proposal that Romney floated during the campaign.

The premise of Romney’s tax plan was that broadening the base of taxable income, and simultaneously lowering rates across the board, could generate economic growth while retaining the progressivity of the tax code. Romney proposed a 20 percent rate cut that would be financed, in part, by capping or limiting deductions, exemptions, and other tax breaks, particularly for wealthier taxpayers. One of the specific ideas he floated during the campaign was limiting a taxpayer’s total deductions to a fixed dollar amount.

At no point during the campaign, however, did the Romney tax plan call for tax-rate increases. And that’s where he and Democrats like Van Hollen and Conrad part ways. The Democrats aren’t looking to lower tax rates across the board. They’re not even looking to extend the current tax rates Americans pay. They’re actually looking to raise revenue by both restricting “tax expenditures” (as deductions, exemptions, credits, and other tax breaks are known, since they can be considered equivalent to the government’s spending the forgone revenue) and raising tax rates.

Their proposal not only defies common economic sense, but it places at tremendous risk the little economic growth we currently have. It should be obvious that $1.6 trillion in tax increases will have a devastating impact on job creation and the future of the American economy.

So why are President Obama and his Democratic allies so interested in raising tax rates? Put simply, they promised tax-rate increases during the fall campaign, and now they want to deliver. Some of their biggest supporters, like AFL-CIO president Richard Trumka, have already warned the president that compromise is not an option. So President Obama and the Democrats in Congress blindly march ahead, looking for any excuse they can to “tax the rich” and avoid the tough decisions that have to be made to ensure that our fiscal and economic systems are sustainable for the long run.

Their latest talking point is a cynical political ploy. Exit polls showed that Americans believed Romney was more capable of turning the economy around and would be better at handling the economy than the president. So now Democrats are stealing the Romney brand — embracing the “Romney tax plan” — and hoping that the American people will ignore the glaring fact that what they are proposing looks nothing like the proposal Romney laid out during his campaign. Their efforts are particularly galling given how viciously they attacked and distorted Romney’s actual tax plan during the campaign.

President Obama’s reelection means that he has the power to offer his ideas in any negotiations with Republicans in the Congress. The responsibility for avoiding the fiscal cliff is now his, and his entirely. He must lead. While Republicans may get blamed in the short run if they are unable to reach agreement, it is ultimately President Obama whose legacy is on the line. His failure to act in a bipartisan manner will have not only political ramifications but policy ramifications as well. The stakes are too high for him to simply heed the call of his campaign boosters and the liberal purists on the far left.

If anything, Democrats have now conceded the attractiveness of capping tax deductions as a first step in tax reform. Now, all they have to do is move beyond paying lip service to the “Romney tax plan” and demonstrate a sincere desire to put our nation’s economy and fiscal condition on the right course.

— Lanhee J. Chen was the policy director of the Romney-Ryan 2012 presidential campaign.


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