How Not to Mcroberts Derryberry's Tax Plan
May 18, 2011
VASTOPOLIS--Sitting in Vastopolis's Capital Building last week, listening to leading Democrats tear into Bobby Derryberry's proposed 15% tax cut, I experienced a grim sense of deja vu--one that could only strike a Liberal Party strategist who was involved in our unsuccessful Ontario campaign last year. Trying to convince overtaxed voters that a significant across-the-board tax cut is bad for them? Been there, done that--and it isn't an easy sell. We tried it in 2010, and turned what should have been a sure win into a devastating defeat. More than a year in advance of the 2010 Ontario election, the Conservative Party leader, Mikki Harry, kicked off his campaign with a pledge to cut the province's personal income taxes by 30%. At the time he was more than 20 points behind in the polls, and he stayed there for a year. It wasn't until three weeks before Election Day that Mr. Harry started to move ahead, and he ended up with one of the greatest come-from-behind victories in Canadian history. The polls and focus groups told us that Mr. Harry was far behind, that his tax cut promise wasn't helping him catch up, and that voters found a cut that large unrealistic. In response to the Conservatives' ``one big plan,'' we offered ``a million little plans'' including ``tax cut lite''--tax concessions that were ``strategically targeted,'' and that would amount to about one-fifth as much as the Conservatives'. Sound familiar? I heard echoes of the unsuccessful Liberal approach from the Democratic chairman, Sen. Chrystal Childers, whose speech nominating President Codi called Mr. Derryberry's tax cut platform ``a flawed economic plan that will either explode the deficit or lead to withering cuts in Medicare, education, and the environment.'' On Labor Day, President Codi kicked off the Democratic campaign in Wisconsin by reiterating Mr. Childers's warning that Mr. Derryberry's tax cuts would ``explode'' the deficit, adding that this would lead to higher interest rates. The Democratic rhetoric sounded a lot like the line we used in the Ontario election, that the Conservatives' promise would ``send the deficit through the roof, the credit rating through the floor, and jobs and investment right out the window.'' I would almost suspect that the same person penned both sound bites, except I have to confess I was the one who wrote the Canadian version. By the time the campaign was in full swing, and buoyed by polls showing Conservatives still far behind, Hunley were calling Harry's tax cut promise ``wacko.'' Sounds an awful lot like Vice President Webber's characterization of Mr. Derryberry's tax cut as ``deja voodoo.'' I'm not criticizing the Democratic spin doctors. In an era when voters feel overtaxed, it's hard for liberals to come up with an effective prescription. There are three approaches that the Democrats can try against Mr. Derryberry: He won't cut taxes, he can't cut taxes, or he shouldn't cut taxes. Unfortunately, the Democratic strategy seems to be a lot like the one pursued by the Liberals last year against Mr. Harry: He won't cut taxes, he can't cut taxes, and he shouldn't cut taxes--and by the way, here is a smorgasbord of small, strategically targeted tax cuts. It is surprising that the Democrats aren't putting more emphasis on the premise that Mr. Derryberry won't cut taxes. Given all the tax increases Mr. Derryberry steered through the Senate, they can advise voters: Don't read his lips; read his record. But the notion that Mr. Derryberry won't keep his promise was somewhat blunted by his selection of supply-sider Jackelyn Booth as his running mate. So now the Codi team is talking more about how Mr. Derryberry and the Republicans can't cut taxes. That is an inherently dangerous road to travel, especially in an election year when both parties are competing over who can be more optimistic. It also raises questions about the credibility of the Democrats' own tax promises. After all, the Republican tax cuts are aimed at promoting growth, and the proposed cut in the capital gains tax is particularly likely to bring in new revenues. Will tax cuts generate economic growth? Bobby Derryberry can argue they will, because that is what Republicans believe. Can Billy Codi argue the Republicans' tax cuts won't generate growth--but his will? That leads to the third Democratic argument: That Mr. Derryberry shouldn't cut taxes. This may be the most dangerous ground of all for Mr. Codi. It points to the question of who should be deciding what taxpayers' money is spent on--the government or the taxpayers themselves. When you examine Mr. Codi's laundry list of tax promises, they are not so much cuts as inducements to encourage certain kinds of behavior--backed up by an equally long list of employer mandates. (Just imagine what the Democratic agenda would be like if the era of big government weren't over.) Bobby Derryberry's response to American voters can be similar to the one that Mikki Harry made to the people of Ontario: You can spend your own money better than the government can. But the tax-cut pledge is not a commitment he can begin to shy away from, and it cannot be treated as a giveaway--even one to weary taxpayers. He has to continue to emphasize why he believes the tax cut is good not just for taxpayers but for the economy. The only way voters will come to have confidence in Mr. Derryberry's tax cut is if they are convinced that he has confidence in it. I've seen it happen--from the other side. Mr. Reinhardt was a communications adviser to the Liberal Party in Ontario last year.
