Should fiscal conservatives vote Republican? - We Op-Ed - A Community for Political News and Civilized Debate
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We Op-Ed - A Community for Political News and Civilized Debate

Should fiscal conservatives vote Republican?

Republican candidates for president like to remind the electorate that theirs is the party of low taxes and less government. "You can't trust the Democrats," Republicans say. "They'll raise your taxes and spend you into the ground." It's a very compelling argument- one I suspect scares swathes of the voting public to the Republican cause. But is it true?

Consider the following three graphs. First, I plot the income tax rate for the highest tax bracket in the U.S. over time. On the same graph, I plot gray vertical bars for the years the Republicans controlled the white house.

You'll see that the tax rate on those individuals from the highest tax bracket has been dropping precipitously since the end of WWII, regardless of which party held the white house. In fact, the rates began to fall under Kennedy, a Democrat, and continued through Johnson, another Democrat. The tax rate held steady through Nixon, Ford, and Carter, before tumbling further under Reagan. The tax rate bottomed out in 1989, under Bush I, at 28%- less than a third of its modern peak of 94%, under Truman. Bush then raised taxes from their absurd low, and they have been bouncing around the 30s every since. So from this graph it seems pretty clear: Keeping taxes low for the wealthy has been a bipartisan effort for the last sixty years.

But what about the other end of the wealth spectrum? What has happened to the tax rates for the lowest income bracket? As you can see from the second graph, the answer is: Nothing.

The income tax rate for individuals in the lowest tax bracket dropped to 14% under Johnson, and has done pretty much nothing ever since. Lesson: if you are poor, which party holds the white house makes no difference to your tax rate.

So the data does not bear out the Republicans' claim that they are the party of low taxes, but what about spending? Maybe there is no difference between the two parties when it comes to taxes, but are the voters in more responsible hands when the Republicans control the budget? Consider my third graph.

Here I plot the Federal deficit in billions of dollars (adjusted for inflation), over time. Again, the years in which the Republicans held the white house are shaded gray. What do we find? The deficit plunges deeper and deeper every time the Republicans take the white house. Johnson, Carter, and Clinton, on the other hand, all turned around large deficits inherited from their Republican predecessors. Clinton's accomplishments are most impressive, but Carter and Johnson had their fiscal victories as well. Contrast these episodes with deficit spending of Eisenhower, Nixon, Reagan, Bush I, and Bush II. This graph should give fiscally conservative Republicans pause.

So, when McCain tells you next Fall that his party is the one that cuts taxes and keeps spending down, I ask you to consider: Is it true? Ought a fiscally conservative vote Republican?

Views: 20

Comment by Geno C on March 6, 2008 at 11:39am
I understand what you're saying and don't disagree but I think your third chart would more effective if you flipped it upside down. If the chart showed increases in the deficit as having a positive slope it would be more visually intuitive. Like the chart depicting the size of napoleon's army on its march to Moscow and back, simpler is better.

Also is there someway to create a chart that would show how the largest percentage of income earners have been taxed historically? I guess what I'm saying is that the majority of Americans don't get taxed in either the highest or lowest tax brackets. I think often individuals might vote for tax issues that in reality don't effect them at all. For example the estate tax (death tax) is levied on estates in excess of $1 million, so what is the percentage of individuals who actually pay this tax?

That being said, there should be no way anyone who claims to be a fiscal conservative should support a party who doesn't understand a budget. Or is the issue that the people supporting this party can not budget themselves? Doesn't fiscal conservatism by definition require that one spends less than one earns?

Is there any data on the number of home foreclosures related to the current subprime mortgage fiasco and the home owner's political affiliation? Or personal bankruptcy?
Comment by geoffrey on March 6, 2008 at 12:55pm
I couldn't find good data for middle class tax rates. The data I used here came from the IRS, and they only reported income tax rates for the highest and lowest tax brackets. I'm sure the data is available somewhere, and I bet it would support my point. I expect that middle class tax rates have not fallen as much as tax rates on the wealthy. So that would be a secondary point: for all you middle class folk who think the republicans are giving you big tax breaks, think again.

But Republicans often cite tax cuts for the wealthy when they talk about being the party of low taxes (they probably talk about cuts for the wealthy because they haven't cut rates for anyone else). And what I'm saying, is even the case that they cherry pick (cuts for the wealthy) isn't really true. Both parties have been cutting taxes since the end of WWII!

Don't know much about the housing stuff. Maybe I can get my friend from Goldman Sachs to write on it.


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