Tax Cuts Can’t Motivate the Republican Base Anymore
It wasn’t just the level of taxes, which was high; it was also how that level interacted with inflation.
.. In an era of double-digit inflation, this was a big problem, and it focused people intently on how much they hated their taxes. It also gave people the feeling that the government was going to go on taking more and more, while delivering less and less in the way of either public order or economic growth. That made people well down the income distribution very receptive to promises of tax cuts.
.. it’s going to be very hard to get those bottom three or four quintiles interested in your tax reform, because their income taxes are already negligible. And since that group has 80 percent of the people in the country, that means it’s going to be very hard to get elected on a platform of tax cuts.
.. Moreover, Republicans now have the same problem that Democrats and Republican New-Deal-Lite types had in 1979: they’ve delivered on the tax cuts, and the tax cuts did not deliver on the fabulous promises of economic growth.