It is lunchtime in America, and the man who would bring back Ronald Reagan’s supply-side economics is addressing the Master Builders Association of Iowa, a largely male group of building contractors who are picking over the remains of their dessert in the ballroom of the Embassy Suites Hotel.
“If you don’t win, will you support whoever gets the Republican nomination for president?” a member of the audience inquires.
Malcolm “Steve” Forbes Jr., the Maharishi of the so-called “flat tax,” puts both hands on the lectern and, with his tight little smile in place, tells the conventioneers: “I’ll say this, any Republican nominee is better than what’s in the White House now.”
Unexpectedly, the crowd drops its dessert forks and erupts into thunderous applause.
That a non-partisan trade association from a blue-collar industry should express such loud disapproval of President Clinton is surprising enough, but that a political novice with a silk-stocking background should succeed in playing on their emotions like Itzhak Perlman is shocking.
But that is how it is when you are on a roll, and Steve Forbes, eldest son of the late publishing mogul Malcolm Forbes, clearly has the hot hand.
With the tipoff of this year’s presidential primary season, the Iowa caucuses, little more than two weeks away, Forbes, who has built his candidacy almost entirely on trashing the U.S. Tax Code, is maintaining his No. 2 position in the GOP pack, within hollering distance of front-runner Sen. Bob Dole.
“We want to finish in the top four in Iowa,” confides Forbes campaign manager Bill Dal Col, somewhat disingenuously, since polls show Forbes making a much better showing than that. “Then,” adds Dal Col, “we’re hoping for the top three in New Hampshire, top two in Delaware, and first place in Arizona.”
The incredible thing is that Forbes, 48, who entered the race only four months ago against much better-known, much more experienced opponents, some of whom have been stumping in those states for nearly two years, has hoisted himself into such a position.
“Absolutely, I think I can win,” asserts Forbes, whose motives for running have been questioned by skeptics. Some conjecture he threw in his hat as a lark, while a recent, rather hostile, profile in rival Fortune magazine suggested he’s just drumming up advertising for Forbes, the flagship magazine of the billion-dollar Forbes family publishing empire.
Two factors account for Forbes’ improbable surge: His reliance on a television advertising blitz and the simplicity of his message.
Forbes has made heavy media buys in early primary states. Possessed of a personal fortune estimated at about $440 million, he has paid for the advertising out of his own pocket. Since he is not accepting federal matching funds, unlike other candidates, Forbes is not subject to campaign spending limits mandated by law.
Thus, while fellow GOP hopefuls are restricted to spending $600,000 in New Hampshire and $1 million in Iowa, Forbes has shelled out some three times that to finance a series of television spots that repeatedly portray his leading GOP rivals in an unfavorable light.
Forbes denies that the commercials take the low road, insisting they are strictly issue-oriented. “I don’t make personal attacks,” he says. “I leave that to the other candidates.”
Dal Col, winking, calls the commercials “voter education.” He notes that in coming weeks the Forbes campaign will step up its aggressive TV juggernaut, producing new ads targeting the weak spots of Majority Leader Dole of Kansas, Sen. Phil Gramm of Texas, and former Tennessee Gov. Lamar Alexander. “We’re in a creative mode,” he says.
Meanwhile, there is an appealing back-to-basics quality in Forbes’ overarching position–his proposal to scrap the 83-year-old graduated income tax, along with the labyrinthine code that has grown up around it, and replace it with an unambiguous flat tax that would fall, more or less identically, on everyone.
The new system would grant a $13,000 exemption to each taxpayer and a $5,000 exemption per child. Thus a family of four earning $36,000 a year would owe no tax. Earnings above exempted income would be taxed at 17 percent, but there would be no tax levied on savings or investment income or Social Security payments, making filing a return a no-brainer. There would also be no inheritance tax–a fact he has driven home to land-conscious Iowans.
“No longer will you lose the family farm to estate taxes,” he tells listeners.
In return, all standard deductions would go the way of the dodo, including the mortgage interest deduction prized by the middle class.
The idea is not new. It was proposed in a 1985 book by two Hoover Institution researchers. Since the work’s publication, others, notably House Majority Leader Dick Armey of Texas, have adopted the concept as an antidote to the Byzantine tax structure and as a Popeye-like gulp of spinach for the supply side of the economy.
But Forbes has become the idea’s most well-known proponent, and like a good basketball team, he has been able to force his game plan on his foes. A few days ago, Gramm unveiled his own version of the flat tax, serving notice that he would not be undersold. His rate? Sixteen percent.
Critics have flayed Forbes’ plan, arguing that the numbers do not add up. They say government revenues would drop dramatically, further increasing the federal deficit as occurred after the Reagan supply-side tax cuts of 1982. And they contend that the benefits would accrue primarily to the rich. Many people would actually owe more tax, they fear.
Forbes lashes back at critics as “scaremongers” who want to preserve the current tax system, with its five income brackets, hundreds of ad hoc deductions, and the giant infrastructure required to keep it afloat. It is an article of faith with Forbes that Congress likes the system because it allows members to mete out rewards and punishments to lobbyists and others.
“The Declaration of Independence was 300 words long,” he tells audiences. “The Bible is 770,000 words long. But the Tax Code is 7 million words long. There’s only one thing to do with such a monstrosity and that’s to kill it, drive a stake through its heart, and hope that it will never rise again to terrorize the American people.”
He denies anyone will experience a tax hike. “Families will keep more of what they earn and save more of what they keep,” he says. “There will be no losers except the IRS.”
Steve Forbes cuts a very odd figure indeed. On the one hand, as a journalist turned citizen-politician he shares similarities with writer-intellectuals like Mario Vargas Llosa of Peru and Vaclav Havel of the Czech Republic, who entered politics in answer to what they perceived as their country’s call.
On the other hand, his emphasis on giving power back to the people by economic means puts him in the company of radical populists of the past like Henry Wallace, if a conservative Ivy League multi-millionaire can possibly be deemed a populist.
Since entering the race, Forbes has enjoyed kid-glove treatment from the media, which initially regarded his campaign as a curiosity. Only lately, with Forbes on the cover of Time and Newsweek, does the media wolf pack seem to be turning on him the full fury of election-year press scrutiny.
By the same token, his GOP foes are taking notice. At a debate in Iowa two weeks ago, Forbes, not Dole, was the object of attack from Gramm and company who sense they cannot catch Dole without first disabling Forbes.
At first, Dole loved it. But even he now feels the nip of Forbes at his heels. Last week the Kansas senator released his tax returns to embarrass Forbes, who has disclosed his salary at Forbes, but refuses to open up his tax returns.
Whether these changing tides will beach the Forbes campaign remains to be seen. But one thing is clear. He seems ready for a brawl.
Forbes has a deceptively mild mien. He resembles the classic milquetoast, with a prissy smile, gold-rimmed glasses that make his eyes look smaller, and a stiff way of presenting himself when he works a crowd. He has a cornball style and uses preppie slang like “get real” and “el zippo” (meaning zero) in speeches.”
But those who know him say the nerdiness masks an inner toughness that makes him formidable in a fight.
And he will need those qualities because everything from his journalistic ethics to his dad’s widely-rumored bisexuality has suddenly become fair game.
“You have to have a thick hide or you’ll go nuts,” he says. “I’ve seen enough of the hazing side of American politics to know what I’m in for.”
Doubtless, he gets his toughness from his father. The elder Forbes was a Renaissance man who took the magazine he inherited from his own father and built a huge publishing conglomerate.
In later life, he became a fabulous character, buying an island in Fiji and a castle in Tangier, flying hot air balloons, collecting Faberge eggs and squiring around Elizabeth Taylor.
Along the way, he ran for several offices, twice trying to become New Jersey governor. Young Steve often tagged along on vote-seeking forays and showed an early affinity for politics.
It’s said that Steve as a tot used to hold mock elections among his stuffed animals, and in the 1952 presidential campaign he and his neighbor, Christine Todd, who later would become governor of New Jersey, were selected to present dolls to Pat Nixon for her daughters.
So Steve is no stranger to politics or the inner circles of government, and though he lacks his father’s elan, he’s accomplishing one thing his father never did: running for president.
A product of the high-end lifestyle of Far Hills, N.J., where he was reared on the family’s 40-acre estate, he went to Princeton, his father’s alma mater. It was the mid-1960s, with flower power everywhere, but hippiedom never attracted Steve. Instead, he soaked up his father’s Republican principles and even founded a campus business magazine.
Graduating in 1970 and drawing a low number in the draft lottery, Forbes spent five months on active duty in the National Guard (he claims his father never used clout to get him out of serving in Vietnam) before marrying Sabina Beekman, a minister’s daughter whom he met at a coming out party.
It was written in stone that he would go to work for his father, and so he did, rising quietly through the ranks as the boss’ son. Eventually he acquired a regular column and title of deputy editor-in-chief and assumed full control of the company and magazine when his father died.
His married life has been similarly uneventful. Residing in Far Hills, he and his wife have raised five daughters.
“Meet Steve Forbes, a family man” reads a piece of campaign literature that has played well in Iowa. The leaflet shows old snapshots of Sabina and Steve and their kids.
The leaflet seems to serve notice to muckrakers that there are no Gennifer Flowers lurking in Steve Forbes’ garden.
But why would a quiet, rather awkward man who has a half-billion bucks and a peaceful home life trade it for the rigors of the stump? And why would he start at the pinnacle, running for president, when he never before has held public office?
He probably wouldn’t have if Jack Kemp hadn’t dropped out of the race. Forbes is a strong supporter of the former Secretary of Housing and Urban Development and served as chairman of Empower America, the conservative think tank that counts Kemp among its resident brains. (Forbes has also served directly in a governmental capacity, having been named chief of the Board for International Broadcasting by the Reagan administration in 1985).
But when Kemp demurred, Forbes’ neighbor, conservative activist Jude Wanniski, began nudging Forbes to get into the race.
“It became very clear,” says Forbes, “that there were not going to be any pro-growth, Reaganesque candidates in the field.” So after some prolonged market testing last summer showed a strong undercurrent of popular support for the flat tax idea, Forbes decided to jump in.
It pleases Forbes to be known as Ronald Reagan’s intellectual heir. “He (Reagan) had a true sense of direction, not subject to focus groups or polls. He concentrated on a few ideas rather than 30, as Jimmy Carter was wont to do, and while he showed great consistency, he had the ability to adapt to change when necessary.”
These are qualities Forbes hopes he has.
“I believe I have the right experiences needed for today’s leadership,” he says. “Ten years ago, when we were fighting the Cold War, I would not have been the right person. But today, it’s the people who’ve spent their lives in politics who have become irrelevant and are missing what’s happening.”
That “happening,” he says, is a paradigm shift. “For the first time in 80 years we don’t face an external threat. So we have the luxury of being able to make fundamental changes, changes that are almost Jeffersonian in nature. The machine age brought bigness and hierarchies, but the information age is bringing the opposite, an emphasis on the individual and personal responsibility.”
Would a Dole notice? “No!” he says. “Sometimes it takes an outsider to see the opportunities.”
That outsider, of course, is himself, perfectly positioned, he argues, to take power away from the “Washington Insiders,” as he never passes up an opportunity to call them, as if they were a baseball team, and give it back to the American people “who know better how to run their lives than anyone in Washington.”
The initial weapon in Forbes’ planned Washington power brownout is the flat tax, because, says Forbes, it will undermine the ability of “the culture of Washington” to control money and dole out favors in the form of special interest deductions. “The power to tax is the power to destroy,” he says.
“The fearmongers tell us that if we cut taxes, revenues will dry up,” he says. “But when John Kennedy cut taxes in the 1960s, revenues actually increased. And when Ronald Reagan did the same, revenues went up by $200 billion by the end of the decade.”
The problem, he says, is that the extra money was squandered by the “Washington Insiders” and that’s why deficits rose under Reagan.
The insiders are lurking everywhere, he suggests. Clinton is one, even though he spent most of his adult life in Arkansas.
“Only a Beltway insider would claim, as he did in his State of the Union address the other night, that the economy is better than it has been in 30 years. Tell that to a couple whose two incomes together don’t buy as much as one income used to.”
Forbes bristles at the idea that he is a one-issue candidate, pointing to his advocacy of measures such as medical savings accounts to supplement Medicare, individual Social Security accounts to restore integrity to system, and a series of educational reforms ranging from increased parental control of schools to enactment of a voucher system.
Forbes has also staked out positions on the death penalty (favors it), term limits (favors them), and tort reform (advocates it.)
He rejects the notion that he is a very rich man trying to buy the presidency with his millions.
“The American people aren’t for sale,” he says. “Voters are less interested in the size of someone’s bank account than they are in whether he can do the job.”
