President Obama hasn’t had much luck in getting living Republicans to endorse his proposed “Buffett rule,” which would ensure that the highest earners pay a minimum federal tax rate of 30 percent.
To find a Republican supporter he has had to raid Ronald Reagan’s tomb. In a speech on April 11, Obama noted that Reagan, as president, had sought to prevent multimillionaires from paying lower tax rates than bus drivers.
Obama continued: “He thought that, in America, the wealthiest should pay their fair share, and he said so. I know that position might disqualify him from the Republican primaries these days but what Ronald Reagan was calling for then is the same thing that we’re calling for now.”
Not so fast, said Republicans. The Buffett rule would impose a new minimum tax on affluent people who receive a large share of their income in capital gains and dividends, which are taxed below the regular rates on income. The effect would be to raise their taxes. Reagan favored cutting tax rates for everyone, including the wealthiest. His initial tax-reform proposal cut the very capital-gains tax rates that the Buffett rule would effectively raise. Reagan wanted to simplify taxes, whereas the Buffett rule would add an additional layer of complexity.
The wrangling over Reagan’s legacy is evidence of his rising historical reputation. Liberals who reviled him in the 1980s have shifted to giving him grudging (and occasionally ungrudging) respect. But while politicians in both parties offer him praise, they also ransack his record for their present-day purposes.
Obama is a serial offender. During last year’s debate over the debt ceiling, Obama praised Reagan for his willingness to raise taxes in 1982 and criticized today’s Republicans for their unwillingness to follow suit. Last week, Rep. Steny Hoyer of Maryland, the second-ranking Democrat in the House, said Reagan “would not have felt comfortable in my opinion in the Republican conference” because of its rigidity on taxes.
But Obama and Hoyer leave out two facts. Reagan refused to raise tax rates, as Democrats wanted then no less than now; instead he raised excise taxes and reduced loopholes. And Reagan in his memoirs concluded that even this limited increase had been a mistake, since congressional Democrats hadn’t come through with spending cuts.
Conservatives make different errors in thinking about Reagan. It is fine for Republicans to seek to learn from the example of their most successful president of the past 50 (and arguably the past 100) years — so long as they draw the right lessons. Steven F. Hayward, the author of “The Age of Reagan,” argues that too many of Reagan’s political heirs have fallen for a myth that Reagan promoted. “Reagan made it look easy,” he says. “That was deliberate on his part.”
Reagan believed that one reason his immediate predecessors were perceived as failures was that they conveyed a sense of being overwhelmed by the presidency. Only with time has it become clear how much “real discipline, hard work and focus” Reagan kept hidden.
This misimpression about Reagan, says Hayward, leads conservatives to underemphasize the importance of all this hard work — both in drafting policies and honing rhetoric — and to think that good gut instincts are a substitute for it. “They don’t have the whole Reagan: Where’s the rest of him?” Hayward points to Sarah Palin as an example of this tendency.
Conservatives have also mistaken adherence to Reagan’s principles with the repetition of his program. Reagan’s agenda in 1981 applied a conservative philosophy to the challenges of the moment. To combat Soviet adventurism he initiated a defense buildup, engaged in ideological warfare and aided proxies overseas. To control inflation, he supported a painful tightening by the Federal Reserve. To spur growth, he cut tax rates.
Circumstances have changed since 1981, in large part because of the success of Reagan’s program. In some respects conservatism has adapted to new conditions. Entitlements have become a much larger share of the federal budget, and conservatives have accordingly made controlling them a much higher priority.
But in other respects conservatism has calcified. The top tax rate is now 35 percent, not 70 percent. Yet many conservatives act as though the current tax rate is just as much an impediment to growth as the old one, and consider its further reduction just as high a priority as it was then. The inflation rate has been trending downward since 1980, but most conservatives are more convinced than ever that money is dangerously loose.
Conservatives aren’t wrong to want to ensure that incentives to work and invest are robust, or to favor a predictable, rules-based monetary policy. But these principles have to be applied to the circumstances in which we find ourselves, not the ones of 1981.
Compared to the various mythical Reagans on offer, the real Reagan is less convenient for today’s Democrats — and a more challenging example for Republicans.
Ramesh Ponnuru is a Bloomberg View columnist and a senior editor at National Review.