Monday’s New York Times featured reporter Jeremy Peters sounding awfully pleased about the apparent failure and unpopularity of Republican tax cuts in “Cut Taxes? In States, G.O.P. Goes Other Way.” Peters’ long hostility to the Republican Party is well documented, and he seemed to relish knocking down a GOP idol, a “dogmatic belief” based in “blind faith.”
Something strange has been happening to taxes in Republican-dominated states: They are going up.
Conservative lawmakers in Kansas, South Carolina and Tennessee have agreed to significant tax increases in recent weeks to meet demands for more revenue. They are challenging what has become an almost dogmatic belief for their party, and sharply diverging from President Trump as he pushes for what his administration has billed as the largest tax cut in at least a generation.
Peters really pushed the idea that the Republican Party should back away from tax cuts:
And now some Republicans say that what has played out in these states should serve as a cautionary tale in Washington, where their party’s leaders are confronting a set of circumstances that looks strikingly similar.
Republicans, with control of Congress and the White House and a base that is growing impatient for tax reform, are trying to solve a difficult math problem: paying for critical programs like infrastructure, health care and education while honoring their promise to deliver lower taxes without exploding the deficit.
The debate promises to test the enduring relevance of one of the most fundamental principles of modern conservatism — supply side economics, the idea that if you cut taxes far enough, the economy will expand to the point that it generates new tax revenue.
With the federal deficit growing and economic growth sputtering along in the low single digits, the Republican Party is facing questions from within over what many see as a blind faith in the theory that deep tax cuts are the shot of economic adrenaline a languid economy needs.
Outside Washington, Republicans are discovering there are limits.
In South Carolina, Republicans overrode their governor’s veto and a blocked a filibuster to increase the gas tax. They also rejected a series of broader tax cuts on the grounds that they were too expensive and voted instead to create a smaller tax incentive for low-income families.
And in the most striking rebuke of conservative tax policy in recent memory, Republicans in Kansas have undone much of the tax overhaul that Gov. Sam Brownback held up as a model for other states and the federal government to emulate.
Much of the devotion to tax cuts as an inviolable Republican principle stems from the success that President Ronald Reagan and Congress had in 1981 when they agreed to an economic recovery package that included a rate cut of about 25 percent for individuals.
Peters located an extremely ex-Reaganite official to “chastise” the party.
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Bruce Bartlett, who advised Reagan on the 1981 tax cuts, chastised Republicans for what he described as their reflexive desire to drive rates lower.
The media would never suggest that liberal ideas like throwing money at every problem can be “too blunt an economic instrument.”
The situation in Kansas was, for at least some conservatives, a jolting realization that tax cuts can be too blunt an economic instrument.
After Mr. Brownback took office in 2011, he pursued a plan that included cuts and, in some cases, an outright elimination of taxes for businesses and individuals to help invigorate the state’s underperforming economy. He described it as “an experiment” in conservative governance that could demonstrate what Republicans were capable of if they controlled legislative and executive branches across the country. (He is Kansas’ first Republican governor since 2003.)
The conservative movement got behind him. The plan was approved with the lobbying muscle of the billionaire Koch brothers’ political network, which is overseen from Wichita, where one of the brothers, Charles G. Koch lives. It had the blessing of prominent conservative economists like Stephen Moore and Arthur Laffer, the Republican Party’s foremost supply-side evangelist.
In urging the Kansas Legislature to act, Mr. Laffer and Mr. Moore said the cuts would have a “near immediate” positive impact on the economy. Mr. Brownback said the plan would pay for itself.
Peters reduced the philosophy of individual freedom via tax cuts as an adolescent anarchist phase.
“If there were three words I could say to Congress right now,” said Stephanie Clayton, a Republican state representative from a district in the Kansas City area, “they would be, ‘Don’t do it.’”
She criticized what she said was a desire by her party to be more faithful to the principle than to the people Republicans were elected to help. Mr. Brownback and many conservatives, she said, overpromised on the tax cuts as a “sort-of Ayn Rand utopia, a red-state model,” citing the author whose works have influenced the American libertarian movement.
“And I loved Ayn Rand when I was 18 — before I had children and figured out how the world really works,” Ms. Clayton added. “That’s not how it works, as it turns out.”