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Taxation Without Persuasion

Ronald Reagan addresses the nation on federal tax reduction legislation, July 27, 1981.

Ronald Reagan addresses the nation on federal tax reduction legislation, July 27, 1981. PD.

Just about everyone is talking taxes this week. On Capitol Hill, Congress has been feuding over tax rates that are part of the “fiscal cliff” towards which the nation is headed post-election. Republicans want to keep the Bush-era tax rates for all individuals, while Democrats seek to raise taxes on the wealthiest Americans, largely repeating the president’s tax message.

Meanwhile, on the campaign trail, President Obama is making the case for tax equality and framing Romney’s plan as a tax burden on the middle class. Citing a Brookings Institution study while stumping in Mansfield, Ohio, President Obama told supporters that Romney “is not asking you to contribute more to pay down the deficit. He's not asking you to pay more to invest in our children's education or rebuild our roads or put more folks back to work. He’s asking you to pay more so that people like him can get a big tax cut.” The Obama campaign is also launching a new campaign ad that will air in eight key states. Citing a report by the nonpartisan Tax Policy Center, the ad argues Romney has paid a lower proportion of his income in taxes than many people of lesser means: “He pays less, you pay more.”

Mitt Romney isn’t taking the punches sitting down though. Romney advisor Eric Fehrnstrom called the report “a joke,” challenging its impartiality and methodology. (Ezra Klein has a worthwhile post on why Romney’s tax plan and the campaign’s response to report are problematic here.) The Romney campaign is also attempting to shift the focus away from the tax issue to the economy, charging that the president has not fulfilled promises made in the 2008 campaign.

Although Article 1, Section 7 of the Constitution gives Congress the power of introducing bills to raise revenues, a brief survey shows that modern presidents have been a powerful force in proposing and selling tax policy to Congress and the American public, especially as part of broader plans for economic recovery. Presidential persuasion is requisite when it comes to attempts at major tax reform. The Miller Center has compiled an online exhibit demonstrating how presidents have used the bully pulpit over the years to sell tax policy -- sometimes successfully, but not always. Although modern presidents have played an important role in crafting and selling plans, since the Kennedy administration, compromise with Congress and across party lines was necessary to achieve major policy reform.  Here’s a brief overview of highlights from the exhibit.

  • In an effort to draw attention to the Special Message on Taxation that he had delivered to Congress, President John F. Kennedy became the first President ever to visit the Internal Revenue Service on May 1, 1961. Kennedy’s message stressed the importance of taxation to American society and pledged to simplify the tax code.
  • Lyndon Johnson used his first State of the Union address to drive home the necessity of passing tax cuts, proclaiming, “We need a tax cut now to keep this country moving.”
  • Gerald Ford pressed Congress with his ill-fated "Whip Inflation Now" (WIN) plan to tackle inflation with a tax increase. Months later, after a lukewarm response to WIN, the President shifted his focus to the high unemployment rate and, with the support of Congress, passed a program that cut taxes.
  • On July 27, 1981 President Reagan addressed the nation about cutting taxes and government spending as part of his economic recovery program, targeting the national debt. In 1986, he promised sweeping tax reform and tax relief for the poor, working families, and businesses alike.
  • George H. W. Bush famously declared "Read my lips: no new taxes” during his acceptance speech at the 1988 Republican National Convention. He was forced to go back on his promise after reaching a deficit reduction compromise with Congress in 1990 that included reduced government spending and tax increases.
  • President Bill Clinton addressed a joint session of Congress in February 1993 to introduce his plans for the Omnibus Budget Reconciliation Act of 1993, including eliminating wasteful government spending, raising taxes, and creating jobs.

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