What the GOP seems to be forgetting in fight for tax reform

  • Steven Mnuchin is starting the tax reform fight by having to remind Republicans of conservative principles.
  • Most of the GOP seems to be unable to stand up for Republican ideals.
  • Tax reform reminds us that wealth belongs to the people, not Uncle Sam.
Treasury Secretary Steve Mnuchin testifies during a Senate Banking Committee hearing in Dirksen Building titled Domestic and International Policy Update, on May 18, 2017.
Tom Williams | CQ Roll Call | Getty Images
Treasury Secretary Steve Mnuchin testifies during a Senate Banking Committee hearing in Dirksen Building titled Domestic and International Policy Update, on May 18, 2017.

Politics in America has become all about President Donald Trump and his personal fortunes and misfortunes. But no matter how that plays out, leaders of both political parties have other core beliefs and agendas to promote, right?


It sure seems like the Republicans have forgotten their core beliefs lately. That's what it looked like during Obamacare replacement bill process in the House of Representatives. The bill the Republicans produced was filled with more government subsidies and not much of a boost to the free market.

Congressional leaders on Capitol Hill remain pretty confused even as Treasury Secretary Steven Mnuchin began promoting the White House tax reform plan this week with private visits to members of Congress and appearances at Congressional hearings.

Mnuchin has already had to beat back questions from wobbly Republicans about the effects of the proposed tax cuts on revenues. And he's also had to work hard to convince several GOP congressmen to back off the idea of adding a new border tax to the overall plan.

But frankly, the GOP slide away from its conservative principles is nothing new. It's been on embarrassing display every since President George H.W. Bush violated his famous "no new taxes" pledge in 1990. And note well, the GOP hasn't won a convincing victory in a presidential election since.

So with taxes as our issue of the moment, let's help the Republicans come out of their confusion and cowardice and remind them of what the winning GOP message is supposed to be:

1) Earned wealth belongs to the people who earned it

For decades, Democrats have talked about tax revenues as if they belong to the government, and it's up to the government to decide how much of the money people earn they can keep. Of course, it's the other way around. Once you really start thinking about every penny of earned money in America being something the government must work hard to prove it needs and deserves, you start thinking like a real Republican. Today's Republicans ought to try it.

2) Economic growth is the goal of tax cuts, not balancing the budget

It's nice that when talking about tax cuts, Republicans want to sound responsible when it comes to our massive debt and deficits. Too bad that this is the wrong time and place. If the GOP really wants to do something about the debt, they should start cutting spending, period. It's not the peoples' job to prop up the government's every little spending project. It's even cowardly for Republicans to join Democrats to pretend that the people won't support cuts to costly programs. If our elected leaders are too afraid to make spending cuts, then they should go into another line of work.

It's important for Republicans to remember that tax cuts aren't meant to help the government pay its bills - even if revenue increase is the result. They're supposed to help the people pay their bills and for businesses to create more jobs and investment. As Nobel Prize winning economist Milton Friedman used to say: "If a tax cut increases government revenues, you haven't cut taxes enough."

In this sense, the Trump administration is mostly leading the GOP in the right direction by insisting that economic growth is the point of its tax cut efforts. But it's also falling into the familiar trap of insisting that the tax cuts will produce enough new growth to quickly increase revenues overall. A real Republican wouldn't really care all that much about that.

Again, if you want to balance the budget, cut the spending. Meanwhile, let the people keep their money while Washington figures out how to be fiscally responsible.

3) What part of "no NEW taxes" don't you get?

This fear of actually having to make spending cuts is where the outrageous border tax plan comes from. The idea is that by taxing imported goods, American businesses will be forced to manufacture more items here and boost jobs and tax revenues. It also happens to be one of the most anti-free market and anti-consumer proposals to come out of Washington in a long time. And that's really saying something. Any Republican still supporting this should really be stripped of his or her GOP titles, rights, and privileges right away. It's a loser.

Of course, each of the above points will go nowhere unless the Republicans find a leader who can articulate and defend them to the general public. It would be nice if one of them could also do that in front of the established news media, but using social media and other communication tools would be fine too. Amazingly, no one in the GOP seems to be able to do this. And that includes President Trump and House Speaker Paul Ryan... at least so far.

That's what we call a "tell." The reason no leading elected Republican can articulate what are supposed to be conservative ideals is most likely because none of them truly understand or believe in them anyway.

Republicans have been in this empty place before. During the 1970s, the entire party was drifting to becoming nothing more than the "Democrats lite" until Ronald Reagan came around to save them with a simple and persuasive defense of conservatism.

It's time for someone in the Republican camp to do that again. But so far, it doesn't seem like there are any takers other than Secretary Mnuchin and he's not going to be able to do this alone.

Commentary by Jake Novak, CNBC.com senior columnist. Follow him on Twitter @jakejakeny.

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