Voters Still Want Tax Cuts
And some Democrats are smart enough to deliver.
BY BRENDAN MINITER
Tuesday, October 24, 2006 12:01 a.m. EDT
Wal-Mart's aversion to high prices seems to be catching on, and surprisingly it's Democrats who are reaping the rewards.
In Arkansas, home to the megaretailer, one of the hottest issues in the governor's race this year is repeal of the state's hated 6% tax on groceries. Getting rid of the food tax has been on the conservative agenda for years, and four years ago repealing it even made it onto the ballot, but lost by a wide margin. Now with the state enjoying a large surplus and Gov. Mike Huckabee retiring, the stars are aligning to abolish the tax that brings in a mere $200 million a year. And it's Democrat Mike Beebe who is leading in the polls with his promise to phase it out.
The party of Bill Clinton is making a comeback in Little Rock by taking a page out of the former president's playbook and stealing conservative issues for political gain. For President Clinton, signing welfare reform was his ticket to re-election in 1996. Now for Mr. Beebe it is targeting a hated tax--something Republicans did in the 1990s to win the governor's mansions in New Jersey and Virginia. There's a lesson here for the GOP.
Asa Hutchinson, a former Arkansas congressman and now the Republican gubernatorial candidate, failed to realize the power of the food-tax issue early enough in this campaign. When cornered by the Associated Press in January and asked if he favored repealing the tax, he gave an answer he's been fighting to take back for months: "I would love to see [the tax] phased out, but the people voted on that and defeated it." Mr. Hutchinson has since proposed immediately repealing the tax, but has not been able to take the high ground away from Mr. Beebe on the issue.
On taxes, Republicans win when they are unequivocally on the side of paying less. And in the states where GOP lawmakers have waffled or, worse, raised taxes, the party tends to implode. In Tennessee, GOP Gov. Don Sundquist spent his last few years in office trying to create a state income tax and voters rewarded his party in 2002 by sending Democrat Phil Bredesen to the governor's mansion. This year Gov. Bredesen will likely walk his way into a second term.
In Colorado, the Republican foundation has crumbled in the past few years. It shouldn't be lost on anyone on the right that two years ago GOP Gov. Bill Owens led the effort to suspend the state's Taxpayers' Bill of Rights to allow for sharp increases in spending and a five-year suspension of rebates the state would otherwise have been forced to mail to taxpayers. Gov. Owens is on his way out now, and it should come as no surprise that Republicans will almost certainly see Democrats capture the governor's mansion next month. Rocky Mountain Republicans are divided and disillusioned. Democrats are not.
The unreported story this election cycle is that while scandals and the war have dominated congressional races, on the state level conservative economic ideas are still winning elections. Voters continue to support promoting economic growth by cutting taxes. Leading this trend is West Virginia, a heavily unionized state dependent on coal and other "extraction" industries.
Gov. Joe Manchin, who was elected two years ago, is now locked in a battle with a surging Republican Party and could end up losing control of the Legislature next month. The biggest issue in the election is which tax to cut and by how much. The debate is being driven in part by Don L. Blankenship, CEO of the largest coal producer in the state, Massey Energy. He promises to spend whatever it takes to put the GOP in power and last year spent $650,000 to hand the governor his biggest setback in office so far, a defeat of a bond initiative aimed at underwriting the state's teacher pension system.
The governor has convened a special panel to evaluate the state's taxes and recommend where to cut. He promises to hold a special legislative session after the election to implement reforms, and his spokeswoman Laura Ramsburg makes no bones about where the governor is coming from on taxes: "The more you can increase the pie, the more it will benefit everyone," she told me. The lesson here is that those benefits extend to tax-cutting elected officials.
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