Michigan Republican Party Chairman Saul Anuzis wrote a lengthy article for Politico making the case that conservative ideas can still win, citing as evidence President-elect Barack Obama's embrace of many conservative themes during the campaign. Anuzis is absolutely correct, and that's exactly why we should hold Obama accountable for his promises.
Unfortunately, one of the "bold, conservative ideas" that Anuzis cites as an example is what's known as a tax holiday. In other words, he wants conservatives to embrace a tax version of Keynesianism that has little chance of accomplishing its goal of stimulating economic growth. Here is Anuzis' argument:
Rep. Louie Gohmert (R-Texas) has proposed taking the $350 billion pledged to the Wall Street bailout and instead funding a two month tax holiday for all Americans. That's two months of no income taxes, Social Security or Medicare taxes. That's thousands of dollars to pay mortgages, buy cars or invest in starting a new business that creates jobs. Newt Gingrich takes Rep. Gohmert's idea one step further, suggesting that instead of adopting Speaker Pelosi's dream of a $700 billion stimulus program, the tax holiday could be extended to a full six months. Now, that's what I call the mother of all stimulus packages!
There's one big problem with this stimulus package: It won't work. There's no good evidence that short-term jolts (such as tax holidays and tax rebates) spur economic growth. As my Heritage Foundation colleague Stuart Butler explains, putting dollars in people's hands doesn't mean they'll rush to the store, buy goods and create jobs. Bloggers got a chance to quiz Gohmert about it last week, and many appeared skeptical of the idea.
Don't get me wrong, Anuzis' intentions are correct. I'd rather keep the money than send it to Washington. But if the purpose is to stimulate the economy, this isn't the right approach. If Anuzis is going to advocate for policy solutions, he should embrace permanent tax rate reductions, repeal of the death tax and reduction of the corporate tax rate. (It's another question of whether the RNC chairman should stay out of policy and focus on politics.)
Conservatives are eager to offer new ideas, but we need to remember that not every new idea is a good idea.