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Ross Douthat (left) and Reihan Salam
Photo by Noel Reyes-Pitts
Ross Douthat (left) and Reihan Salam

The Republican future

Books | Co-author Ross Douthat says a reformed GOP can help-and win over-the "working class"

Issue: "Obama," Nov. 15, 2008

In Grand New Party: Republicans Can Win the Working Class and Save the American Dream (Doubleday, 2008), authors Ross Douthat and Reihan Salam lay out a long-term program for Republican renewal. Since the Washington cliché, "the devil's in the details," has a lot of truth to it, Douthat answered some questions about details.

Q: You want the GOP to push for tax code simplification that reduces taxes on investments and hugely expands tax credits for children. Let's have some details.

Our plan is shamelessly stolen from Ramesh Ponnuru, a senior editor at National Review, who's been proposing something along these lines for some time now. The basic idea is to keep taxes lowest on investments of all kinds-and to treat raising children, arguably the biggest and most expensive investment in the American future a family can make, as akin to starting a business or investing in a company.

Q: Specifically . . .

We propose a tax reform that would raise the per-child tax credit to $5,000 a year and make it refundable against payroll taxes-currently the biggest tax many working-class families pay-as well as income taxes. Under Ponnuru's plan, this credit would be coupled with a broader revenue-neutral simplification of the tax code that would also lower taxes on business and investment. The winners under the plan would be families with kids and entrepreneurs; the losers would be affluent, childless Blue-Staters. It's cynical politics, in a sense-but for a family-friendly, business-friendly party, it's good policy.

Q: Isn't our tax system biased against mothers who spend many years caring for children in their homes? What do you propose for them?

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The tax code provides a break for parents who work and spend money on daycare, but doesn't provide a similar break for parents who take care of their kids themselves. We'd prefer to do away with the day-care tax break entirely and simply roll that money into the expanded per-child tax credit, but we also think there should be more options available in general for women (or men!) who want to move in and out of the workforce when their kids are young. Let's offer tuition credits to parents who've spent time at home with their kids, to allow them to get vocational or post-graduate education that smoothes their path back into the workforce.

Q: You praise the welfare reform of 1996 that reduced welfare rolls and increased employment rates but you propose a new program of wage subsidies that you say will work better than either Earned Income Tax Credits or more boosts to the minimum wage. How would your proposal work?

At the moment, working-class wages are inflated indirectly-by the EITC, which offers a tax credit that you can collect at the end of the working year (and that many workers don't even know they're eligible for), and by minimum-wage regulations, which force employers to pay their workers a certain wage. It would be better to subsidize wages at the bottom of the income ladder, and reduce the subsidy to zero as workers move up the income ladder. Rather than making corporations like Wal-Mart the enemy, as liberals do, and simply demand that they sacrifice their competitive advantage to hike their employees' pay, wage subsidies would let government and business be partners in the laudable goal of moving low-income men, especially, into the mainstream economy.

Q: You want thousands of new police officers on the streets, and you say that reducing crime is just one of the benefits that would result.

Conservatives have taken a get-more-punitive, build-more-prisons approach to fighting crime for the past three decades-and it's worked. Crime has fallen even as the incarceration rate has gone up and up. But we're reaching a point of diminishing returns: The prison system is too costly, the moral costs of imprisoning so many young men-especially young black men-are rising, and the crime rate is inching upward. A lot of religious conservatives have taken up the cause of prison reform, but you can't have prison reform without a new strategy to keep crime low in an environment of less-punitive sentencing. One of the most successful anti-crime measures of the 1990s was simply putting more policemen on the beat, and it's a place where there are still enormous gains to be made.


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