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April 6, 2006
The Secrets of Their Success
Joseph J. Thorndike

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The Secrets of Their Success

Joseph J. Thorndike is a contributing editor with Tax Analysts.

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How have Republicans managed to impose unpopular policies on a willing, or at least complacent, populace? Democrats have been struggling with that question for years, desperate to explain -- and presumably emulate -- the winning Republican formula. With neither party able to muster a decisive majority in national elections, governing from the fringe may be the new model for American democracy.

Let's hope not. But in their 2005 analysis of 1994's Republican revolution, Off Center, Jacob Hacker and Paul Pierson paint a dark picture of democracy subverted. GOP leaders -- dubbed the New Power Brokers by this pair of political scientists -- have managed to liberate conservative politicians from the bothersome constraints of popular democracy. And in the process, they have started to remake American government and society.

Hacker and Pierson, who hail from Yale and Berkeley, respectively, attribute GOP dominance to several factors, including an energized base among grassroots conservatives. But the true genius of Karl Rove, Grover Norquist, and the rest of the conservative cadre is "backlash insurance": a collection of strategies that insulate Republicans from a disapproving and often dispirited electorate.

Agenda control is a key element of backlash insurance. Political scientists have long tried to explain why some issues dominate political discourse, even as others languish on the periphery of public attention. By enforcing a remarkable degree of Republican unity, today's Republican leaders have managed to control the political agenda for much of Bush's presidency.

Even more importantly, however, Republicans have used the art of policy design to advance a hard-right agenda clearly out of step with public opinion. They have designed policies to obscure their true intent, disguising their powerful attack on the modern welfare state.

Any number of examples spring to mind, but Hacker and Pierson take a long, careful look at just one: the Bush tax cuts. By advertising their apparent pandering to the middle class, Republicans have been able to disguise their actual pandering to the superrich. The Bush tax cuts have featured marquee benefits for the common folk -- marriage penalty relief, expanded child credits, and the like. Those relatively modest measures, in turn, have allowed Rove and Company to obscure their ministrations to the overburdened elite, distracting Americans with some sophisticated sleight of hand.

Hacker and Pierson also point out the Republican penchant for budget tricks, including various phase-ins, phaseouts, sunsets, and similar legislative gimmickry. Those nefarious devices have been widely reviled, in the pages of this magazine and elsewhere. Indeed, for Tax Notes readers, this tax story will hold few surprises. But Off Center deserves attention, if only because it makes a persuasive, comprehensive, and sometimes elegant case. It's a compelling morality tale.

Voters as Victims

But I'm not buying it. Or at least, not all of it. I'm not convinced that Americans were bamboozled into supporting the tax cuts. As Hacker and Pierson acknowledge, average voters took home some real benefits. And while rich voters will eventually get more, that's beside the point.

Poll data, which Hacker and Pierson cite frequently, does seem to indicate some wariness among voters about the distribution of the Bush tax cuts. And most Americans seem willing to let some of the cuts expire; an NBC News/Wall Street Journal poll conducted in January found 51 percent of respondents opposed to extending the tax cuts on capital gains and dividends.

But when it comes to taxes, polls are notoriously confused. And Americans have never repudiated the tax cuts in any decisive manner. The estate tax provides a case in point. In August 2005 one survey found 64 percent of those polled wanted to eliminate the estate tax because of the burden it placed on small, family-owned businesses. A month later, another poll found only 15 percent willing to retain the estate tax as a means to pay for hurricane relief. Then, in January 2006, 69 percent of those polled by the AARP endorsed retaining the tax on estates worth more than $2 million if the revenue were used to shrink the deficit.

So what do those numbers tell us? Hard to say, but they tell me that American public opinion is mercurial, confused, and subject to manipulation, at least when it comes to tax policy. What the numbers don't tell me is that estate tax repeal -- perhaps the purest example of Bush's solicitude for the rich -- is broadly unpopular.

I wish we could blame the Bush tax cuts on a confused, distracted, or otherwise misled American public. I fear the real answer is something more disturbing. Democrats have lost some of these issues fair and square, failing to make their case in any sort of consistent, persuasive fashion.

Moreover, I'm not convinced that Republicans originated the craft of policy manipulation. Once upon a time, for instance, Democrats used steep income taxes on the rich to justify a range of regressive consumption taxes on the poor. That was all well and good, except that no one actually paid the steep marginal rates. As historian Mark Leff has observed of the 1930s, soak-the-rich taxation was largely symbolic, used to obscure the unhappy incidence of federal taxes overall.

So GOP misdirection on the distribution of tax cuts has some precedent in the history of Democratic tax increases. I've exaggerated the case against Franklin Roosevelt, to some degree; he honestly believed in the moral necessity of soaking the rich, and he did his best to bring effective rates close to statutory rates, repeatedly cracking down on tax avoidance. But the point remains: Politicians have always structured policy to emphasize some effects and minimize others. Republicans may be particularly adept at this game, but they didn't invent it.

Hacker and Pierson also take for granted that GOP efforts to backload the tax cuts were politically wise. They assume -- as have most Republicans -- that Congress will never have the guts to reverse any of the Bush cuts. But today that gamble looks more uncertain. I wonder if Republicans won't learn to regret, for instance, their unwillingness to compromise on the estate tax. Permanent repeal seems likely to become ever more problematic.

Changing Fortunes

Hacker and Pierson published their book last fall. Alas, time, tide, and politics wait for no one, and their analysis already seems a bit dated. GOP dominance of the policy agenda is less certain today than it was last spring. Caught in the political vortex unleashed by Hurricane Katrina, Jack Abramoff, and the wars in Iraq and Afghanistan, the Republican revolution has stalled.

But recent troubles notwithstanding, Republicans did manage a really impressive run, at least for a while. Karl Rove may not be a modern-day Machiavelli, but he's still a relative genius when compared to most political operatives. Hacker and Pierson do a fine job explaining his success. Too bad if even they can't show Democrats a path out of the wilderness.