Tax reform doesn’t mean tax increase.

"Tax reform is the political fulcrum for addressing the growth shortage, the fiscal crisis and our runaway health-care prices problem. It's the one idea that reaches across the partisan divide. It might be the only thing that could save the Obama presidency."

--Holman Jenkins, Wall Street Journal

Two conservatives just recently jumped on the idea that tax reform that lowers rates while simultaneously eliminating loopholes is something both liberals and conservatives can endorse. Why not, when lower rates help do what everyone wants, boost economic growth? The Wall Street Journal’s Stephen Moore pushed tax reform in a column entitled, “Tax Reform's Moment? Where else is the growth going to come from?” And syndicated columnist Charles Krauthammer similarly argued that “Debt-Reduction On Grand Scale Is Within Reach.”

Neither Moore nor Krauthammer recommend an overall tax increase (Krauthammer specifically rejects it). But neither do they call for an overall tax reduction. They favor tax reform, a more efficient taxing system that begins with the same level of overall tax revenue, but by lowering rates, promises to spur growth.

Since then, familiar partisan divides have emerged. Conservatives have made it crystal clear that overall taxes cannot go up. And progressives are just as insistent taxes must increase. Here’s liberal Ezra Klein, writing in the Washington Post about last Thursday’s Republican presidential debate:

every single GOP candidate on the stage agreed that they would reject a budget deal that was $10 in spending cuts for every $1 in tax increases. Even Fox News’s Bret Baier couldn’t quite believe what he was seeing. . . A world in which the GOP will not agree to deficit reduction with a 10:1 split between spending cuts and tax increases is a world where entitlement reform can’t happen. It’s a world where the “supercommittee” fails and the trigger is pulled, and thus a world in which $1 out of every $2 in cuts comes from the Pentagon. . . The losers in tonight’s debate were anyone who wants to see the sort of compromise necessary for the political process to work.

As we wrote earlier, progressives are determined to secure some sort of tax increase, a tax increase of any size, because they desperately want validation at the polls in 2012 for the big tax increases they hope await America from 2013 onward. Of course, neither Klein or the president will say this openly. Conservatives are just as equally determined to deny progressives the tax increase validation they seek.

In resisting compromise settlements that allow for even slight tax increases, conservatives refer back to when Ronald Reagan compromised with Democrats in 1982, and it backfired. From Heritage Foundation scholar Lee Edwards:

Reagan “admitted that his failures to cut federal spending absolutely and to balance the federal budget were his ‘biggest disappointments’ as president.”

Reagan went along with . . . chief of staff James Baker, who persuaded the president to accept the Tax Equity and Fiscal Responsibility Act of 1982 . . . $98 billion [in tax increases] over the next three years. . . Baker assured his boss that Congress would approve three dollars in spending cuts for every dollar of tax increase. To Reagan, [the 1982 act] looked like a pretty good "70%" deal. But Congress wound up cutting less than 27 cents for every new tax dollar. What had seemed to be an acceptable 70-30 compromise turned out to be a 30-70 surrender. Ed Meese described [the 1982 act] as "the greatest domestic error of the Reagan administration."

Nevertheless, the progressive “teeny, weeny tax increase” net cast over the Washington pundit world has caught at least one conservative fish, a catch that complicates conservative efforts to hold the line against tax increases. Commentary’s Peter Wehner recently wrote of the $10-cuts-for-$1-increase proposal:

this thought experiment has to do with (a) a real spending cuts deal and (b) a compromise plan, not what one believes to be an ideal one. It is hard for me to imagine that any serious conservative who wants to limit government wouldn’t accept such a deal. The alternative, after all, would not be to reduce the size and scope of government without tax increases; it would be to keep Leviathan at its current size instead of significantly cutting it at the cost of a relatively small tax increase. . . if taxes cannot be raised under any circumstance — then we have veered from economic policy to religious catechism.

Harsh. And hurtful to the cause of halting federal growth.