The latest issue of Forbes features Steve Forbes‘ conversation with former President George W. Bush about topics including taxes.
Let me start by asking about taxes. Cutting tax rates worked for Coolidge in the 1920s, Kennedy in the 1960s, Reagan in the 1980s and in the early part of the last decade. Why is there still resistance? I think there’s a basic philosophical difference in the tax debate about whom you trust to spend the money. If you trust the individual, the collective wisdom of the American people, you understand why it’s important to let them have more money in their pockets. If you believe that government is a better allocator of resources, then you advocate more taxes.
The debate is couched in fairness. Our tax code is very progressive. We need to figure out what the best tax code and best tax rates are that will stimulate private growth.
When you pushed your tax cuts, you went out of your way to make sure that middle and lower-income people, proportionately, got more of a cut. You tried to undercut the idea of it being all for the rich. How would you advise candidates and officials today? How does one fight this populist demagoguery? I don’t believe that the government ought to be selecting who are the winners and who are the losers. If you’re going to have a tax cut, everybody gets a tax cut.
We ought to have a tax code and an economy that enables people to succeed. It’s very hard to defeat populist rhetoric, whether it’s about immigration, trade, foreign policy or taxes. There’s a populist strain in our system that people like to exploit, and taxes are an easy issue to use to pit one group of people against another. It takes a leader who can paint an optimistic future in which everybody can succeed to overcome this.
