DOLE SETS A TAX-CUT TRAP
12:00 AM, Sep 2, 1996 • By FRED BARNES
LUCKY BOB DOLE. Since President Clinton has just published a campaign book, Between Hope nd History, Dole's new book on his plan to cut taxes is sure to get prominent display in bookstores, right next to Clinton's. The biggest problems for Dole advisers were deciding whether to publish the book as a paperback or a hardcover and what to name it. Hardcover won, with a first printing from HarperCollins of 250,000 copies. Book titles came and went. Tax Cut was considered and rejected. So was The 15% Tax Cut. Then Restoring the American Dream, a popular slogan in speeches at the Republican convention, was chosen, only to be tossed aside later as unoriginal. The tentative title: Trusting the People.
The Dole camp hadn't counted on an assist from Clinton. When Dole aides began work on Trusting the People in late July, they didn't know Clinton was coming out with his own book. But the battle of the books fits perfectly with the Dole strategy of trapping Clinton on the big issue of the campaign, cutting taxes. The strategy is simple: Propose a large tax cut for individuals, then hope Clinton not only opposes the cut but engages the issue aggressively. The president and his aides have gone along, bashing Dole daily on taxes. This has kept the tax issue as the centerpiece of the campaign. The Clinton book, by the way, also trashes the Dole tax cut.
There's more to the Dole trap. The premise is that the candidate who's for cutting taxes has a better chance of winning the White House. This has been true in the last four presidential elections. Ronald Reagan won twice as the anti-tax candidate. George Bush, with "read my lips, no new taxes," won in 1988. And Clinton captured the tax issue in 1992 with his talk of a middle- class tax cut and Bush's failure to live up to his pledge. Now there's Dole with his proposal for cutting personal tax rates 15 percent, halving the capitalgains rate, trimming the tax bite on Social Security benefits, and providing a $ 500 tax credit for each child under 18.
Clinton's noisy opposition is essential to the Dole strategy for two reasons. One is that it ensures conflict on the tax issue, which keeps the media interested. The other is that Clinton corners himself in the position of disparaging tax cuts and defending austerity. "Austerity doesn't sell," says David Smick, a Dole adviser. The more Clinton and his allies criticize the Dole tax cut, the harder it will be for Clinton to propose a large tax reduction of his own -- or at least propose one credibly.
Clinton has another reason for shying away from a sweeping tax cut. He infuriated liberals by signing a conservative welfare reform bill on August 22, making him all the more averse to angering them on taxes. In any case, there's "absolutely no pressure" on Clinton to match Dole on taxes, says White House press secretary Mike McCurry.
Maybe not, but the White House and the Clinton campaign have done their part to keep the tax issue alive. Clinton's first reaction when Dole unveiled his plan August 5 was to declare himself "unalterably opposed." George Stephanopoulos has used every TV appearance to denounce Dole for backing "tax giveaways" that aren't "paid for." Harold Ickes, the deputy White House chief of staff, has attacked Dole's tax cut in background sessions with reporters. At his birthday party in New York on August 18, Clinton offered a fresh analogy for a large tax cut. He recalled a bakery around the corner from his house in Little Rock. "There were cookies, bagels, donuts, fruit tarts," he said. "Every one of them was good, but if you bought them all and ate them all at once you'd get sick. That's my attitude about this tax cut issue. We can have one, but we have to have one we can afford."
The Clinton campaign takes daily jabs at Dole on taxes. The day after the first Dole TV ad was aired, the campaign issued a statement disputing virtually everything in the commercial. "Today, taxes are the highest in American history," the ad said. Oh no, the Clinton campaign responded. "This is misleading. The average federal tax rate for the typical family is lower now than when President Clinton took office." That claim, it turns out, is misleading. The Dole ad says taxes are at their peak, which is true -- the ad does not single out federal taxes.
The Dole campaign is considering new television spots on taxes, including one with snippets from Dole's and Jack Kemp's speeches from the GOP convention and another with man-on-the-street interviews on taxes and the economy. No doubt, the Clinton camp would respond to those, too.
The result of all this is that Clinton has taken the bait on taxes. By attacking Dole's plan, he has created a new fault line in the campaign: One party is for cutting taxes, the other isn't. It's change versus the status quo. That's the view of Dole strategists, anyway. Clintonites claim they haven't slipped inadvertently into full-blown criticism of Dole's tax cut. It's where they want to be, since they insist the tax issue helps Clinton, not Dole.
In pushing a big tax cut, "I think they're making a huge error," says Stephanopoulos. Dole, famous as a deficit hawk, ruins his credibility by suddenly embracing tax cuts, according to Stephanopoulos. He's a hypocrite. But it's worse for Dole if people believe he really will cut taxes. Then, Stephanopoulos says, they'll fear a bloated deficit or deep new cuts in Medicare, Medicaid, and other programs that the Dole tax cut would require.
The Clintonites don't really sound all that confident the tax debate will play out their way. "Instinctively," McCurry says, "the American people love Bob Dole's tax cut, but in their hearts they know they won't get it. It's a chicken in every pot." Stephanopoulos qualifies his insistence that the tax issue aids Clinton: "As long as it's our tax cut versus their tax cut and not their tax cut versus our pain, then the president gains." That's a big "if."
Clinton belabors the same point. "I am for a tax cut," he declared August 18 in a 60 Minutes interview. "But it's targeted to the middle class. It's targeted to education and to childbearing." So is the tax relief for small business that was tied to the increase in the minimum wage. And in his acceptance speech at the Democratic convention, Clinton is expected to announce tax breaks for inner-city job development.
The trouble is Clinton's tax cuts appear insignificant compared with Dole's. And Trusting the People, the Dole book, casts the Clinton approach as entirely inadequate to cope with current economic problems. The book cheerleads for big tax cuts. It defends supply-side economics and the Reagan tax cuts of the 1980s, and argues that only the Dole plan is broad and sweeping enough to spur stronger economic growth and end wage stagnation for middle-class workers. Clintonites are sure to disagree. No doubt they'll tell us why.
by Fred Barnes