In today’s Wall Street Journal (Feb 7), Alfred S. Regnery opines as follows (with my comments) on “How McCain Can Convince the Right”:
1. “Take a firm no-new-taxes pledge. Mr. McCain … needs to promise that he won’t increase Social Security taxes – especially by lifting the earnings cap – or increase hidden taxes in regulatory schemes, and that he will try to eliminate the death tax.”
That seems to be asking too much in some respects and too little in others. Regnery is suggesting that McCain do nothing to improve the tax system (as though it’s perfect as is) other than to try to do something he cannot possibly accomplish with this congress. The best defense is a good offense. That doesn’t mean taxing less, in terms of lost loot, but taxing smarter.
McCain’s top economist told me that McCain favors taxing estates (after a large exemption) at the same rate as long-term capital gains. If so, he should not be shy about that – it’s a great idea. That would be much more effective than tilting at windmills until 2011, when the estate tax comes back in full force.
Lifting the earnings cap is indeed a huge threat, adding about 10 percentage points to marginal rates for everyone earning more than $100,000. Expiration of the 2003 tax rates would add another 5 points to that. That would bring the top tax rate to 50%, not to mention state taxes and surtaxes Congressional Democrats have proposed to pay for more health insurance subsidies and easing the alternative minimum tax.
If Democrats want to raise the Social Security tax rate to pay for rising benefits, let them have the courage to propose that. In terms of potential damage to the economy, that would be better than tapping general revenues – which means switching from a flat-rate payroll tax that exempts income from savings to a progressive income tax that applies higher tax rates to both labor and capital.
2. “Get specific on spending. Mr. McCain talks a lot about pork barrel projects, earmarks and the need to get spending under control, but so does everybody. He needs to release a bold, Reaganesque proposal with specific reductions he would pursue as president, what programs he will try to eliminate, and how he will attempt to control a spendthrift Congress… .By getting specific, Mr. McCain would endear himself to a lot of fiscal conservatives.”
Absolutely right. And McCain would also endear himself to a lot of libertarians. It would be risky for Republicans to ignore how much money Ron Paul has pulled up from the grass roots, not to mention votes. That is not just because of Dr. Paul’s good looks and charming wit.
3. “Pick a fight with the press.” That’s bad advice. Let others start any fights. That rule also happens to be good foreign policy, as Ron Paul has observed.
4. “Pick a conservative running mate early. Mr. McCain needs a young vice president with stellar conservative credentials so that conservatives can know that an acceptable successor is being trained and waiting in the wings.”
The giant elephant in this room, the one polite people are not supposed to mention, is that McCain is a cancer survivor and no spring chicken. He is unlikely to serve a second term, and incumbent Vice Presidents have often won the next race. All voters will take his V.P. choice far more seriously than usual.
Regnery likes Gov. Mark Sanford of South Carolina, but national voters don’t know him and there is little time for an introduction. One name they are belatedly beginning to know very well is Mitt Romney. He came close enough in key places like California to have earned the V.P. nod if he’ll take it. In the campaign, I’d send Mitt on tour to focus on economics, where he’s more comfortable than McCain, but ask him to downplay that “competitiveness with China” stuff.
Romney has a few good ideas McCain could borrow, particularly exempting working seniors from the payroll tax. I have minimized the combined income and payroll tax by deliberately minimizing work and salary. But encouraging premature retirement ends up costing the Treasury a lot of income tax revenue, and deprives the economy of skilled labor.
5. “Conservatives … will never forgive him for what they perceive as his abuse of the First Amendment in McCain-Feingold, for his stand on immigration, and for his initial opposition to the Bush tax cuts.”
Regnery is right about McCain-Feingold, for reasons George Will explains better than anybody. But that fight can go on in the legislature and the courts, regardless of who is president. McCain’s positions on immigration and the 2001 tax law are not something that can so easily be dismissed by referring to some checklist of conservative orthodoxy (e.g., must we call a Catholic socialist a “conservative” if he or she wants to allow states to make abortion a crime?).
The American right is diverse, not monolithic or unchanging. In the 1970s I was on the masthead of the magazine Regnery now edits, The American Spectator, as well as those of National Review and Reason. Human Events ran my syndicated column in recent years. Yet that doesn’t mean I feel obligated to agree with Rush Limbaugh on every single topic, or that a Republican candidate has to measure up to some somewhat arbitrary standard of purity. If he’s good on A, B and C, but not so good on X, Y and Z, voters have to think clearly about how to set their own priorities among those issues. Since the president has no authority over “social issues,” and conservatives should fear granting such authority, such choices will often put more weight on good economics, without which costly military spending could soon prove highly problematic.
On complex topics like immigration and taxes, reasonable people can disagree and sometimes they should.
The U.S. labor force is getting old and growing slowly, which is just one reason I think McCain and George W. Bush were both right that we need many more temporary work visas to provide a legal alternative to illegal residence. Nearly half the illegal residents do not sneak across the southern border but arrive here legally by the millions as tourists, students and business travelers.
I was no enthusiast for the 2001 tax bill (although not because the measures threatened Iraq funding or were too kind to the rich). In a Wall Street Journal article on May 30, 2001 I wrote that “the primary objective of the $1.35 trillion cut … seems to have been to maximize revenue loss rather than to minimize tax distortions and disincentives.” I noted that only 31% of the estimated static revenue loss from original Bush tax bill was devoted to reducing the four highest marginal tax rates. Cutting all of the top four rates combined risked less revenue loss than the foolish gesture of reducing the lowest tax rate to 10% from 15% on the first few thousand. Not everything in that bill made sense, even after the worst glitches were fixed in 2003, and no tax law is ever perfect or permanent (least of all one that was designed to self-destruct in 2010).
Mr. Regnery ends by saying “John McCain needs conservatives more than conservatives need John McCain.” That sounds right.
