Dick Gephardt's Beautiful Mind
House Minority Leader Richard Gephardt recent called for an economic summit aimed at figuring out how to "simplify the tax code." The Missouri representative also said "the first $10,000 of your education should be tax deductible." If that sounds a tad inconsistent, consider what he said a few days earlier in a speech to the Democratic Leadership Council.
Gephardt urged tax incentives for partnerships between universities and small businesses, investment in renewable energy, the purchase of fuel-saving vehicles, and improved energy efficiency in new buildings. He would also increase the Earned Income Tax Credit, make refundable the $500 child tax credit, and make permanent the credit for contributions to retirement savings plans.
Simplifying the tax code means getting rid of deductions and credits in exchange for a lower rate. It's tough to do that when you're adding deductions and credits.
Gephardt is hardly the first politician to take contradictory tax positions. In 1996 GOP presidential candidate Bob Dole called for "a fairer, flatter, simpler tax system" while simultaneously pushing for adoption tax credits, IRAs for homemakers, and other preferences. But Gephardt is unique in that he has been contradicting himself so brazenly for so long.
As a junior House member in the late 1970s, he supported tax credits for private and parochial school tuition. In 1987 he told The New York Times he no longer favored such credits because the Internal Revenue Code should not be "cluttered with credits and deductions." Now he's back to pushing tax deductions for educational costs.
In 1981 Gephardt voted for the Reagan tax cuts. When he ran for president in 1988, he defended that position, which his aides saw as a winner. "[Sen. Paul] Simon and [Gov. Michael] Dukakis stumbled into it, criticizing us on taxes," his deputy campaign manager told the Los Angeles Times. "If they want to talk about how Dick Gephardt voted to cut taxes in New Hampshire, we said, sure, we'll talk about that."
Last year Gephardt cited the Reagan cuts to denounce the Bush cuts. "People like me got calls from my constituents in 1981 saying, 'Give Ronald Reagan a chance,' " he said. "Well, after we lost our alternatives, people like me gave him a chance. I voted for the Reagan tax cut in the end in 1981. It was a mistake."
Speaking in Iowa in July 2001, Gephardt suggested that the 1993 tax increase was a model: "I'm glad we did what was right in 1993, and I'll do it again because I believe in being fiscally responsible with the taxpayers' money." A few days later, he issued this statement: "I never addressed the future of taxes in my remarks because I don't believe they need to be raised."
In the 1980s, Gephardt sponsored legislation to overhaul the tax code by scrapping tax preferences. He told a group of business executives in 1985, "I feel more comfortable with the free market system deciding where capital should be allocated than with Dick Gephardt planning it."
In the 1990s, Gephardt proposed another major overhaul, which would have reduced tax rates by repealing nearly all itemized deductions. In a debate with Jack Kemp, he explained that he wanted everyone on a level field. "If you go out and earn your wages every day by working, you get taxed at a certain rate," he said. "If you earn by investing in capital...then you will pay at a similar rate. Why do you want to prefer one set of actions over another?"
A striking feature of this proposal was a requirement for a national referendum before any increase in tax rates. In 1995 Gephardt said such a requirement was necessary to block costly tax breaks. "When people look at tax reform," he said, they think, " 'Oh, sure, there they go again. They're going to lower my rates and they'll be back in two years opening up some more loopholes for rich people, and I'm going to pay through the nose.' "
Yet even before his 2002 tax credit fusillade, Gephardt was supporting tax preferences for individuals and businesses. The Web site for his 2002 re-election campaign includes this boast: "Dick Gephardt has consistently co-sponsored the Historic Home Ownership Assistance Act, which provides a Federal tax credit to individuals who rehabilitate historic homes."
Such wild contradictions could prove a handicap if Gephardt seeks the presidency again. His spinmeisters might try to contain the damage by recalling a famous quotation from F. Scott Fitzgerald: "The test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function."
Khaki Socialism
A few years back, I coined the term khaki socialism to refer to the tactic of promoting bigger government either by invoking military necessity or by dressing domestic initiatives in the language of war. Since 9/11, of course, the term has gained new and greater significance.
Literally before New York could clear the rubble of the World Trade Center, lawmakers were trying to spend more on anti-terrorism measures than even the administration wanted, prompting President Bush to threaten a veto. The Republican chair of the House Transportation and Infrastructure Committee said that his $71 billion railroad bill was vital because the terrorist hijackings "demonstrated even more the need for transportation alternatives."
We've been down this rhetorical road many times before. World War II and the Cold War spawned far-flung constituencies that sustained useless or obsolete military bases and weapon systems. Time and again, the word defense was the lubricant that helped unlock the Treasury doors. Hence, the National Defense Education Act and the National System of Interstate and Defense Highways.
History suggests other paths the khaki socialism will take in the months and years ahead. Noting that Soviet propagandists liked to talk about America's slums, liberals in the 1960s said that solving domestic social problems would help win our psychological war with communism. The first Kennedy-Nixon debate in 1960 was about domestic policy, but JFK began by saying that such issues "involve directly our struggle with Mr. Khrushchev for survival."
Five years later, Lyndon Baines Johnson said: "All you have to do is look at the morning paper this morning to see the rockets that were paraded down the avenues in the Soviet Union yesterday or the day before, and realize that until we banish ignorance, until we drive disease from our midst, until we win the war on poverty, we cannot expect to continue to be the leaders not only of a great people but the leaders of all civilization." In the late 1960s, even peaceniks got into khaki socialism by expanding the definition of "national security" far beyond anything that could plausibly become a GI Joe accessory.
Their sons and daughters are at it again. The National Association of Social Workers says on its Web site, "The social work profession can contribute to a redefinition of national security that includes healthy children, the prevention of poverty, an adequate education for all residents, and a productive economy." Writing in USA Today, Ted Halstead and Michael Lind warn that current bills "ignore one of the weakest links in our homeland defense: the armies of Americans without health insurance."
That metaphor points to another variant of khaki socialism, one that goes something like this: If big government can win World War II, the Cold War, and the Gulf War, then surely it can win the war against poverty, illiteracy, or disease.
When the United States does manage to crush Al Qaeda and its allies, the War on Terror will become part of this refrain. The argument will be that we can solve domestic problems if only we apply national resources as massively and single-mindedly as we did in the military struggle. AFL-CIO President John Sweeney recently told the Los Angeles Times: "You know, the president's getting good marks for the war against the terrorists, but he is neglecting the domestic war." Of course, the federal government did declare wars on poverty and drugs, with deeply disappointing results. In both cases, the domestic D-Days turned into stateside Vietnams.
Although military metaphors do help us understand many aspects of politics, they are not a literal guide to public policy. Put a little differently: If we've learned one thing in the past 40 years, it's that government cannot always help people by daisy bombing them with tax money.
It would be a shame if we followed military victory with khaki-wrapped p
As I said from the start of my blog, I am a communications major. This means plain and simple I like to communicate. (and I do) I love to tell a story and share with others my experiences. When I first started this blog, I was kind of opposed to the idea. The word "Reason Magazine - Contributors > John J. Pitney, Jr.
