While Republicans were performing in Detroit, Democrats scattered around the rest of the country were coming to a fateful decision that hands the tax-cutting issue to Ronald Reagan.
The surprise finding by Democratic lawmakers, testing voter sentiment back home during the brief congressional recess: tax cut fever is down, not up. In fact, returning to Washington July 21, They reported their constituents never had been interested in the Kemp-Roth tax reduction bill.
That message was most joyously received in the Oval Office, where President Carter and his advisers felt touched by heaven-sent tidings. They had dreaded the return of Congress, panting with tax cut demands. Instead, Democrats at the White House and Congress are in rare unison that tax reduction should be postponed until after the election. Thus, party lines on tax reduction are clearly drawn for November.
There might yet be pre-election tax cuts if one highly influential Democratic dissenter -- Sen. Russell B. Long, chairman of the Senate Finance Committee -- gets his way. But a tax bill pushed through by Long and Republican senators (even if reluctantly signed by the president) will not alter the clear partisan choice on tax reduction.
That may well reflect a massive misreading of the public mood, if expert pollsters are correct. It could be a fatal error in Carter's strategy to keep beleaguered blue-collar workers from joining the Reagan crusade. The Democrats are gambling that the auto worker, oppressed by inflation and fearful of losing his job, is not interested in an $800 tax cut.
That is precisely the impression veteran Democratic politicians, adept at winning elections, brought back to Washington. Rep. John Brademas, the shrewed House majority whip, told us that his South Bend, Ind., businessmen and workingmen alike, victimized by inflation, want no part of Kemp-Roth (cutting income taxes 10 percent a year for three-years).
Old-fashioned liberal Brademas might be accused of pro-taxation bias, but not Rep. James Jones, the leading Democratic Tax-cutter in the House. He reported findings identical to Brademas, both in his conservative Tulsa, Okla., district and on a speaking trip to South Dakota.
No wonder, then, that tax fever on Capitol Hill has subsided, much to Carter's comfort. While presidential aides a month ago worried that Carter could not catch up with Reagan on this issue, they are now convinced the Republicans have hung on an albatross around their necks. Indeed, Carter strategists are urging Democratic politicians to call it Reagan-Kemp-Roth, linking the popular presidential candidate with a supposedly unpopular notion.
But is it unpopular? One prestigious pollster recently took a secret national poll that indicates voters are aching for tax cuts, but are troubled by two factors: first, they have been so misled by the politicians that they no longer believe promises they hear; second, they are so concerned by runaway federal spending that they give the priority to budget balancing over tax-cutting.
But voters actually cannot choose between Carter's balanced budget and Reagan's tax cut. Whether or not taxes are reduced, the budget will be far out of balance -- a fact clearly understood by voters (nearly 5-to-1 in the secret national poll). What's more, 40 percent of these voters think the budget can be balanced by greater business activity induced by tax reductions -- probably a higher percentage than among even Republican congressmen.
Democrats may be so influenced by their nostalgia for the days when low-bracket tax-cutting was the name of the game that they are misjudging the public mood. In a July 20 article for The New York Times, Carter campaign chairman Robert Strauss noted that the taxpayer in the $6,700-to-$10,000 bracket would receive a mere $120 tax cut. But the great election chase of 1980 is not for these lowest-income taxpayers, notorious non-voters who vote Democratic if they vote at all.
The quarry is that auto worker who now earns $25,000 a year but falls ever farther behind economically, partly because of rising taxes. In 1979, an estimated 38 million American paid taxes on income over $15,000, of whom 27 million reported over $20,000. For the $25,000 auto worker with a wife and two children, the third-year tax savings of Reagan-Kemp-Roth would be a tidy $809.
That taxpayer would profit less from Democratic plans, particularly temporary one-year tax relief (not to be pushed until after Election Day). The potential danger that Democratics may get caught in this tax trap is countered by claims that any tax reduction is inflationary.
In 1978, Brademas sent his colleagues a Business Week commentary denouncing Kemp-Roth as inflationary, which they put to good use in their races. Republican opponents ran for cover. Brademas is now thinking of reprinting the same article. With Ronald Reagan certain not to copy the Republican retreat of 1978, voters will be able to make a choice on policy rarely offered them.