Tax Revolt Still Alive and Well at Age 32

| Fri Dec. 10, 2010 2:01 PM EST

Just a quick note. A few years ago it was all the rage to suggest that the era of the tax revolt was over. Mark Schmitt's argument shortly after the 2006 election was typical: "Just as the tax revolt era had a beginning," he wrote, "so will it have an end. And there are indications that the end might be approaching." After all, several Democratic governors had raised taxes recently and lived to tell the tale. And our fiscal future was so grim that before long even Republicans were going to have to admit that taxes had to go up. Right?

Well, as it turns out, the tax situation has developed not necessarily to the Democrats' advantage. So what's next? Here was Mark's advice back in 2007:

The first step will be to establish an acute sense of fiscal and economic crisis. That won’t be difficult, since it’s true. The difficulty is in expressing it the right way. “The deficit” is an abstraction. As long as we accept that balanced budgets every year are not a realistic goal, the difference between a deficit of $150 billion and $600 billion is meaningless. Instead, Democrats should emphasize tangible consequences — such as a choice between cuts to vital services and a devastating economic shock versus manageable tax increases.

....A giant showdown with all revenues and spending on the table would certainly call the bluff of Republican conservatives who say they want to cut spending but have never been willing to take the political consequences of doing so. At the same time, it might allow Democrats to put on the table some of the tangible benefits of additional revenues, such as funding for expanded health coverage or for real economic security programs to help workers manage the risks of the economy.

....The risk here is of putting too little on the table rather than too much. If the fight is just about extension of a particular tax provision, it will be hard to win. And if politicians aren’t willing to talk honestly about the magnitude of the changes necessary, the default will be excruciating: In a few years, we will enter a period of chronic crisis, scraping by each year with a painful series of budget gimmicks, fee increases, and disguised tax hikes — just enough to get by for the year before the dreary cycle begins again. After a few years, the public impression would be of a government that is constantly raising taxes, constantly cutting services, yet never solving either the fiscal crisis or other problems. And the grinding obsession with that abstraction called “the deficit” would continue to make it impossible to reconnect taxes with the benefits and security people expect from government.

Well, the acute sense of fiscal crisis is here. And a giant showdown is certainly plausible in the near future. And Mark was certainly correct that a limited fight over extensions of particular tax provisions would be hard to win. Obviously we need to make a broader, more tangible case about taxes and funding of popular government programs.

But for whatever reason, liberals have utterly failed to make that case to the public. The only positive news on the tax front is that polls show most Americans favor higher taxes on the rich, and even there public sentiment is quite plainly too shallow to actually affect congressional action. Like it or not, over the past four years we've made exactly zero progress on the tax front.

So here's a note to every liberal activist raging against Obama's tax deal: this is all going to happen again in two years. We all know it, and that's one of the big reasons so many lefties are opposed to the deal. But public opinion counts, and right now public opinion is still pretty firmly on the side of low taxes. Whatever it is we've been doing for the past four years hasn't worked.

So what are we going to do differently between now and 2012? We know exactly when and where the next battle is going to take place. We know our old strategy has been a dismal failure. So what's our new one?

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