


The tax issue is the most powerful political issue in American politics, going back to the Boston Tea Party, the (tax on) Whiskey Rebellion, the threat of secession over the 1828 “Tariff of Abominations,” and the tax revolt that brought Ronald Reagan to the presidency. And sent George H.W. Bush back to the dugout.
Recent elections in Britain and Australia remind us that the “conservative” or low-tax, limited government party can throw away its most powerful political weapon with the smallest nod towards new and higher taxes. A trust is broken that can break a party seen to betray its base voters.
How big a deal is the tax issue?
Today, the Republicans control the U.S. House, Senate, and presidency. But between 1932 and 1994 Republicans won full control of the Congress — House and Senate — only twice. In 1948 and 1952. Only twice in 62 years.
That changed only after the Republican Party became the party that would NEVER raise taxes. And that was not until 1994.
Back in 1964, Mr. Conservative Arizona Senator Barry Goldwater voted against the John F. Kennedy-inspired tax cut. And George H.W. Bush famously signed a tax hike in 1990 after promising in writing and in his speeches that he would never raise taxes.
He threw away a perfectly good presidency when he raised taxes.
Until that moment, George H.W. Bush was a hero. He drove Iraq out of Kuwait and did not stick around to occupy the place. He managed the collapse of the Soviet Empire. Russia broke into 15 pieces with no blood on the floor.
But. He raised taxes. The Democrats ran millions of dollars of ads about his tax hikes, and he lost to a little-known governor from Arkansas.
He threw away a perfectly good presidency when he raised taxes.

Every Republican watched him do this, and in 1994, they ran committed in writing and public speeches to NEVER raise taxes. They swept the House and Senate in 1994 and, since then, have held the House and Senate, both houses of Congress, for a total of 18 years. Democrats have held Congress for only six years since the Republican Party became the party that would NEVER raise taxes. That is a three-to-one ratio.
This story runs through other nations’ politics.
BRITAIN: Margaret Thatcher cut taxes, and the Tory Party of Britain dominated parliament for 18 years. Then, after the Conservative Party regained power in 2010, it consistently raised taxes, managing to raise tax revenue as a share of GDP to the highest level since the Second World War. In 2022, the party blocked the tax-cutting initiatives of a new low-tax leader, Liz Truss, and replaced her with Rishi Sunak, who raised taxes and lost control of the country to Labor’s Keir Starmer.
AUSTRALIA: Despite a strong lead in the opinion polls as early as January this year, the Australian conservative opposition suffered its largest loss since the party was formed over 80 years ago. Central to the story was its abysmal tax policy.
The Liberal-National Coalition (despite the name, this is the “Republican Party” of Australia) had always been known as the party of lower taxes and responsible economic management. That was one of its main political strengths, and one of the few topics where voters consistently rate it highly.
Not this year.
An early turning point in the election campaign was the 2025 government budget and budget response. The ruling Labor Party announced a modest income tax cut — taking the lowest income tax rate down from 16 percent to 14 percent over two years. This would have partly compensated taxpayers for the automatic tax increase that occurs every year due to bracket creep, where inflation pushes worker incomes into higher tax brackets.
The obvious (and expected) response would have been for the Coalition to criticize the meager size of the tax cut and announce their own larger tax cuts. Inexplicably, the Coalition said it would oppose Labor’s tax cuts.
The Labor government could hardly believe its luck. They quickly pushed the tax cut legislation through parliament. The opposition then doubled down on their mistake, and made it clear that they would go to the election with a policy of reversing the tax cuts — in effect running on a policy of increasing income taxes on (nearly) all workers.
This created the surreal situation where Australia’s left-wing parties could honestly campaign on being the low-tax alternative as the “conservative” Coalition threw away its central selling point.
Supporters of the Coalition hoped that their party would eventually announce a larger tax reform package and regain their anti-tax advantage. Didn’t happen. As an afterthought, the Coalition called for a one-year cut to the fuel tax and a one-time-only $1,200 tax refund — followed by higher income taxes in the future.
Instead of offering lower taxes, the Coalition offered more government spending. When the Labor government announced a plan to spend $8.5 billion more on the national health system, the Coalition immediately responded with a plan to spend $9 billion. The bidding war continued throughout the campaign.
The election reduced the Coalition to just over 40 seats in Australia’s 150-member House of Representatives. The high tax policy was bad economic policy and lousy politics.
This almost happened in the United States when a sustained campaign just this year tried to get President Trump to abandon his consistent demand that every one of his tax cuts enacted in 2017 be permanent.
Big government Republican Senator Josh Hawley of Missouri and some White House staffers tried to get Trump to endorse an increase in the top marginal tax rate. That is the rate that hits many growing small businesses and self-employed entrepreneurs, two sources of innovation and new jobs.
Trump kept his oft-stated commitment to lower the taxes for all Americans and refused to play the politics of envy and division. He forcefully shut down the coup attempt.
The leadership of the Republican Party was also united in rejecting the idea of throwing away the Republican Party’s greatest strength: voters know that Republicans might do many silly things, but raising taxes is not one of them.
Britain, Australia, and the U.S.: The conservative parties in the first two nations strayed on taxes and lost power. The Republican Party has kept its anti-tax commitment and now holds the House, Senate, and the White House.
READ MORE:
Trump’s ‘No Tax on Tips’ Pledge Could Shape His Political Destiny
Renewing Trump Tax Cuts Crucial to America’s Economic Strength
Extend the Tax Cuts? Sure, but Don’t Expect ‘Big, Beautiful’ Growth
Grover Norquist is President of Americans for Tax Reform. Dr. John Humphreys is Chief Economist at the Australian Taxpayers’ Alliance.