Tax Wars

BOTH the Democrats and Republicans, playing recession politics, want to win points with voters by sponsoring tax bills to energize the sluggish economy and ease taxpayers' burdens. At the same time, however, neither party wants the other to earn political credit that may help the opponent in November.

A consensus tax bill that contained modest economic-growth incentives without deepening the budget deficit might be good for the country. However, any such bill would be, if not "revenue neutral," at least politics-neutral, since any political credit flowing from the legislation would be evenly divided. Thus there is little incentive to the parties for such a "waste" of political energy in an election year.

The predictable outcome, therefore, is just the political stalemate we are seeing on Capitol Hill today. President Bush lacks the votes to enact the tax proposals he laid out in his State of the Union speech, while congressional Democrats lack the votes to override a presidential veto of a tax measure like the one the House of Representatives barely passed last week.

But the tax wars shouldn't be viewed merely with cynicism. While they seem, on one level, an exercise more in gamesmanship than governance, on another level they manifest deep differences in political philosophy.

If taxation politics were simply a matter of "pandering" to middle-class or any other group of voters, the Republican and Democratic tax plans would probably look very similar. In fact, the plans include important differences that reflect divergent economic and social viewpoints: roughly, a Republican prediliction for "growth" vs. a Democratic tilt toward "fairness."

So for all their political theater, the tax battles, even if they result in no legislation, usefully help sharpen voters' perceptions of the parties in this campaign.