THE DEMOCRATS, who talk a great deal about "new ideas" but have difficulty turning them into winning political issues, might take a lesson from Sen. Bill Bradley of New Jersey.
Bradley is the man who launched the great tax-reform crusade of 1986. His ideas, which seemed revolutionary and impossible when he first proposed them four years ago, are now close to becoming law. He has plenty of company these days, from Sen. Bob Packwood to Ronald Reagan. But Bradley was out there first -- and, for a while, nearly alone -- with his proposal for rate-cutting, loophole-closing tax reform.
"He initiated the idea," says Jude Wanniski, a prominent supply-sider who is president of Polyconomics, Inc., a New Jersey consulting firm. He notes that Bradley has fought for tax reform "the same way he became famous as a basketball player -- passing off, giving other people the shots."
Bradley's intellectual breakthrough on tax reform was to combine the traditional liberal approach -- closing loopholes that benefit mainly the rich -- with the supply-side conservatives' demand for lower marginal tax rates. The result was Bradley's 1982 "Fair Tax" plan, which proposed removing many tax preferences and simplifying the tax code with just three rates: 14 percent, 26 percent and 30 percent. Most subsequent reform plans, including the measure that passed the Senate Finance Committee this month, were modelled on Bradley's.
The Fair Tax was an example of what Democrats have been looking for -- mostly without success -- for much of the last decade. It synthesized liberal and conservative ideas in a new package that could appeal to middle-class Americans. As Bradley noted in an interview this week, the proposal offered "lower rates for the middle-income people who are the backbone of America, who are paying most of the freight." And who, it might be added, increasingly have been voting Republican in recent presidential elections.
The Bradley proposal also offered Democrats a way to shed their anti-growth, tax-and-spend image by allowing them, as Bradley says, "to advocate economic growth and fairness simultaneously." The only problem with the idea was that it challenged the party's penchant for soak-the-rich rhetoric and interest-group politics.
Bradley set out, from early 1982 on, to sell his idea to a skeptical Democratic establishment. He found an enthusiastic co-sponsor for his bill in Rep. Richard Gephardt, a Missouri Democrat. But for a long time, he made little headway.
"Income taxes are too high," Bradley declared in an April 1982 speech to the National Press Club introducing his proposal. At the time, the idea sounded like heresy to many Democrats.
Bradley argued in that first speech that the problem with the tax system wasn't that it didn't tax rich people enough, as a generation of Democrats had argued, but that it didn't treat taxpayers earning the same income equally. He asked: "Why do we fully tax some kinds of income from capital, like interest and dividends; partially tax other kinds like capital gains; defer tax on other kinds, like IRAs; and impose no tax at all on still other types of capital income, like interest on municipal bonds? This simply is not rational. These distinctions don't have any inherent logic. They reflect a long legacy of political compromise."
The speech, recalls a Bradley aide, attracted a modest audience of "two men and a dog."
Next Bradley went to the 1982 Democratic mid-term convention in Philadelphia, the gathering of a party elite still reeling from the Carter defeat. If ever there was a group that needed new ideas, this was it.
"Over the years, the tax code has become a vehicle for political favoritism and social engineering," Bradley said, summarizing in that phrase the tax policy enacted by a generation of Democratic-controlled Congresses. "Democrats must rally behind a low-rate, broad-based tax system that is fair, simple and efficient." The speech was received politely, but the idea still had little support from Democrats.
The big political test was 1984. Recognizing that the Democrats desperately needed a winning issue against a popular, low-tax incumbant, Bradley took 5,000 copies of his book, "The Fair Tax," to the Democratic convention in San Francisco. When the Democratic platform was written, it included a nod in the direction of the Bradley-Gephardt bill, and the usual rhetorical pledge to eliminate the "plethora of personal and corporate loopholes." But the platform-writers couldn't bring themselves to endorse Bradley's call for lower marginal tax rates.
Bradley still hoped he could sell Walter Mondale on the Fair Tax idea. He travelled to Minnesota to brief the candidate on his proposal. Mondale listened but "nothing happened," Bradley recalls.
The irony of Bradley's crusade is that it sparked a strong Republican response. The GOP was quicker to understand the political importance of Bradley's idea than were the leaders of his own party. Soon after the introduction of Bradley-Gephardt in 1982, Rep. Jack Kemp introduced a similar bill of his own, which his advisers frankly admit was modelled on the Bradley approach. By 1984, the Reagan White House also was jumping on the bandwagon.
As Bradley aides tell the story, it was a case of the Republicans overestimating the political cunning of the Democrats. The Reaganites, worried that Mondale would endorse the Fair Tax and turn it into a winning campaign issue, pushed the Treasury Department to develop a Republican alternative. After the election, that proposal was released and became known as "Treasury I." The administration proposal moved the campaign for tax reform into high gear.
Bradley kept pushing in 1985. He visited the House of Representatives frequently -- an unusual move for a senator -- to brief members of the Ways and Means Committee on tax reform. He even agreed to play pick-up basketball in the House gym with several members (something that Bradley, as a former professional star, dislikes doing) to lobby them on his proposal. Congressional aides credit Bradley for helping win House passage of a sweeping tax-reform bill last year.
f tax reform becomes law this year, President Reagan will deserve much of the credit. He provided the political support that kept the issue from sinking into the sea of special-interest lobbying and Congressional indifference. But many Republicans concede that it was Bradley who provided the intellectual spark.
"The thing he understood early on was that there had been a schism in the past," says Bradley's legislative aide, Gina Despres. "Liberals had talked about tax reform as soaking the rich and redistributing income. Conservatives wanted to use tax reform to improve the economy, by allowing markets to allocate resources. What Bradley understood was that you could merge the two."