Scarborough on the GOP and Taxes

Joe Scarborough thinks that the media is being mean to Republicans because commentators have described the GOP’s intransigence on taxes as part of raising the debt limit and reaching a larger deficit reduction deal. Richard Cohen says that the GOP “has become a political cult”. The New Republic’s Jonathan Chait describes tea party conservatives as the party’s “Hezbollah wing.” Even David Brooks describes the GOP’s attitude towards taxation as having “no sense of moral decency.”

Scarborough is outraged by this. Why? Well, he thinks that these same columnists have not been as hard on Democrats. This betrays that weird Washington-only attitude that fairness demands that you must always treat both parties exactly the same in all instances. More importantly, he attempts to make the substantive point that Republicans are being savaged in the media because they “dare to stand athwart history and growl “not this time.”” In other words, the GOP is actually doing something praiseworthy and simply do not deserve the abuse. What are their virtues? There seem to be two. First:

For 50 years, the federal government has grown at a sickening rate. Whether Republicans or Democrats run the White House, Washington’s establishment always gets its way — bigger budgets, bigger deficits and higher taxes.

In 1980, the annual budget was $590.9 billion. By the beginning of the next decade, the yearly budget was $1.253 trillion. In 2000, the budget was up to $1.789 trillion in annual outlays, and by 2010, it was up to $3.456 trillion. After a decade of Obama’s budgets, the CBO projects our annual budget will explode to $5.451 trillion in 2020.

Whenever I read stuff like this it reminds me of Sean’s Connery’s admonition to an enemy in The Untouchables: “Always brings a knife to a gun fight.” I am hard-pressed to recall an instance in recent years in which statements on economic policy by prominent Republicans fails to make them sound economically illiterate. Responding to their mind-numbing repetition of half-truths, partisan slogans, basic misconceptions, and misleading statistics is just too easy.

This passage by Scarborough is an excellent example. He bemoans the runaway spending by pointing out that the budget has grown from $591 billion in 1980 to nearly $3.5 trillion in 2010! But this is an almost childish comparison. Of course, the budget gets bigger as the years progress. This happens because the economy gets bigger, the population increases, and inflation, well, inflates the numbers. The only meaningful measure of the size of the government budget is to view it as a percentage of GDP. In 2007, the last year before the catastrophic effects of the financial crisis, the federal budget was 19.6% of GDP. And what was it in 1980? 22.2%. Not so "sickening", is it? True, in 2010 at 25.4% it is at a post WWII high. But this is almost entirely due to the effects of the financial crisis. GDP is depressed and spending on budget items that always go up in bad times—unemployment insurance, food stamps, Medicaid, etc.—have drastically increased. When the economy recovers, spending will no doubt return to more normal post-war levels.

I honestly cannot know if Scarborough is economically illiterate or just makes witless arguments like this because they are the only tools he has when trying to defend the indefensible. Either he is a partisan hack or staggeringly uninformed. I can’t think of a third option.

Scarborough’s second defense of current GOP attitude towards taxation is captured in this passage:

As media types blast away at their barbaric Republican opponents, it is worth noting that just last year the GOP won the largest nationwide landslide victory in modern history based in large part on its pledge to oppose tax increases. Over 230 members of the House signed the no-tax pledge while 40-plus Senate members also signed to oppose tax increases.

The GOP have been unfairly criticized because they are only doing what they said they were elected to do—adhere to Grover Norquist’s no-tax pledge. But this is a strange defense of a policy. Pledging not to raise taxes under any circumstances is precisely the fanatical pathology that Brooks, Chait, and Cohen were lambasting. To defend their doing so absent any substantive defense of the policy itself but only because they promised they would do it is like defending the mafia hit man because he faithfully follows the Cosa Nostra code. The important issue is not faithfulness to a code or practice, but rather the practice itself. Is it defensible?

Scarborough ends his essay with a passage that makes me think that not only does he not understand elementary economic data, he doesn’t even understand the dynamics of the party he defends.

That doesn’t mean a grand bargain is out of reach this session of Congress. If Obama moves forward with specific cuts on entitlement programs and Pentagon expenses, Republicans must work aggressively to close loopholes that favor billionaires and multinational corporations. I am quite confident that even tea party members would be fine with Warren Buffett paying more than a 14 percent income tax rate and would be happy to see the world’s largest corporation, GE, pay more in taxes than their own household.

The proposals he mentions: to cut the military budget, to close loopholes that favor the wealthy, and to end the preferential treatment of investment income over wage income are precisely the sort of things that the GOP has vowed not to do. Warren Buffett pays an absurdly low tax rate because capital gains and stock dividends are taxed at a much lower rate than wage income. The GOP position on this issue expressed in the Paul Ryan Roadmap is to eliminate taxation on investment income entirely! House Republicans have already stated that they will not agree to eliminate multi-billion-dollar tax breaks on oil companies or eliminate tax provisions that reward companies for moving jobs overseas. The very no-tax pledge that members of the party have signed forbids even closing loopholes and eliminating deductions as a way of increasing revenue.

If Scarborough had fairly and accurately related the current GOP attitude on taxation, perhaps he would be more sympathetic to those who describe them in the most unflattering terms.