Conservative thinkers tout three innovative and controversial proposals

By Perry Bacon Jr.
Sunday, May 16, 2010

Billboards advertising the importance of marriage. Shifting coverage of the elderly from Medicare to private insurance companies. Big tax cuts specifically for parents.

Conservative thinkers are touting those bold ideas and others in journals, op-ed pages and blogs. While the "tea party" movement has dominated public attention, small blocs of Republicans have quietly spent the past year crafting policies on a wide range of issues, looking to build support if the GOP regains control of Congress or the presidency.

Many of these ideas won't appear in the GOP's platform anytime soon, because they lack broad agreement within the party. And Republican lawmakers plan to spend most of their time ahead of this fall's election attacking Democrats instead of pushing new policy ideas, a view conservative thinkers acknowledge is politically wise.

At the same time, Republicans on and off Capitol Hill agree that while the goals that animated the GOP in the 1970s, such as keeping the federal government small, remain relevant, conservatives need a new set of policy proposals that reflect how the world has changed since the Reagan era.

Below are three of the most innovative proposals from conservatives. None is likely to become law soon. But eventually they could take hold within the party, the same way unconventional ideas in the past, such as allowing people to use money they would otherwise pay in Social Security to create personal accounts, have turned into party orthodoxy.

The parent tax cut

Robert Stein, a conservative economist who served as deputy assistant secretary for macroeconomic analysis in George W. Bush's administration, says the tax code is unfair to one particular group of Americans: parents.

He says that parents invest thousands of dollars in raising members of society who eventually fund programs such as Social Security and Medicare, but retirees who chose not to raise children get the same old-age benefits as those who did.

"Once a country adopts an old-age pension system, it creates an implicit bias against raising children," Stein said. "One of the natural reasons for raising children is not just because you like kids, but to take care of yourself in old age. Once a country gives everybody access to everyone else's kids' money, it undermines the natural economic incentive to raise kids."

Under current law, parents with children get a $1,000 tax credit plus a tax exemption for each child, saving a typical middle-class family of four about $1,550 per child.

Stein would replace this system with a $4,000-per-child tax credit. That parental tax credit would be funded in part through Stein's other big idea: Simplify the personal income tax to two brackets -- one that taxes 15 percent of income and the other 35 percent. He estimates that few people now in the 10 percent bracket would pay more if they move to 15 percent, because of the child exemption.

But he acknowledges that some people would be bumped up to the 35 percent tax rate, mainly upper-middle-class taxpayers who either didn't raise children or whose children have already left home.

"To be blunt, the plan is a tax hike on the rich and makes the tax code even more progressive than it is today," he wrote in a recent piece in the conservative journal National Affairs.

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