GOP Governors Ask ‘What Would Reagan Do?’

Furious at Washington gridlock and seeking to get their party back on top, Republican governors -- like President Ronald Reagan before them -- are waging an anti-tax campaign aimed at the income tax.
by | April 2013

Republicans came away from their 2012 presidential defeat with two big conclusions: They needed a new voice, and their new voice needed new ideas. The real problem, Republican political consultant and uber-linguist Frank Luntz suggested in The Washington Post, was that Republicans were in deep trouble because they had become the party of “no,” full of leaders who don’t connect with ordinary people. “Talk is cheap,” he wrote, “but bad language is costly.” The solution? A better megaphone with “a new language.”

House Republican Majority Leader Eric Cantor picked up the megaphone with a February speech titled “Making Life Work.” His aim, he said, was “to strike a balance between what is needed to advance the next generation, what we can afford, what is a federal responsibility and what is necessary to ensure our children are safe, healthy and able to reach their dreams.” His goal was to “eliminate the doubt gripping our nation’s families” about the future facing their children.

Read the April issue of Governing magazine. 

Away from Washington’s tap dance along the fiscal cliff, however, are a handful of governors who have decided to reshape “Republicanism” with an ax instead of a scalpel. In January, Louisiana Gov. Bobby Jindal’s explosive speech to the Republican National Committee put it bluntly: “We must stop being the stupid party.” Instead, he said, “it’s time for a new Republican party that talks like adults.” The key was to “recalibrate the compass of conservatism in the real world, beyond the Washington Beltway.

“America is not the federal government,” Jindal told the RNC. He argued that the ongoing inside-the-Beltway debate was the wrong one, too focused on budget accounting and not enough on how America can “once again become the land of opportunity.” It was, Jindal insisted, the wrong battle fought on the wrong turf. Allowing Democrats to dictate concerns would lead to a government “so big that it will take us all down with it.”

So how do Republicans “focus on real people”? Jindal proposed ending his state’s income tax, both personal and corporate. Not to be oudone, Kansas Gov. Sam Brownback, who slashed the state income tax last year, now aims to wipe out the rest of it -- along with reductions in the number of state employees, less spending on welfare and the merger of several departments.

The Brownback plan echoes the debate that economist Arthur Laffer sparked when he drew a graph on his napkin claiming that cutting taxes would bring in more revenue by encouraging investment. And the income tax is top of the Republican governors’ hit list. Nebraska Gov. Dave Heineman proposed an end to his state’s income tax, with lost cash replaced by a broadening of the sales tax base. Republican governors in Indiana, North Carolina, Ohio and Oklahoma are racing down the same road.

That’s the core of the red-state uprising: Republican governors furious at Washington gridlock and determined to purify the Reagan model. It has a powerful anti-tax campaign aimed squarely at the income tax, backed by the assumption that lower taxes will bring higher growth. It’s their answer to WWRD, or what would Reagan do?

The strategy is politically bold -- and economically risky for state budgets. Across the nation, the individual income tax produces about a third of all state taxes, more than any other source. Moreover, as state budgets limped back from devastating economic collapse, income tax revenues grew almost twice as fast in 2011 (the most recent data available) as the yield from sales taxes. The more state economies shift to services, the more sales tax revenues might lag.

But the financial arguments don’t account for the visceral anti-Washington fervor. Virginia Attorney General Ken Cuccinelli is staking his 2013 gubernatorial campaign even further to the right, with the claim that Democrats are eating away at individual liberties and growing big government programs that “make people dependent on government.” Who benefits? Politicians who use the programs to trap recipients and boost their power.

From the U.S. Capitol, Cantor is pushing a middle-class agenda, while political strategist Karl Rove has created the new Conservative Victory Project, aimed at taking out Republicans who, he and his supporters believe, would weaken the party’s effort to retake the U.S. Senate. But the Republican governors believe they have the upper hand in the civil war over the party’s future.

It’s a high-stakes battle, The Weekly Standard’s William Kristol writes, “that can be liberating,” by providing “opportunities for clear speech and bold proposals.” But, he points out, “there is no substitute for victory.” There’s no mistaking the conclusion of many Republicans in the states that victory will never come if they wait for their inside-the-Beltway colleagues to act. They think they have the weapons the party needs, and a historic opportunity to finish the Republican revolution that, they believe, was waylaid in Washington.

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