Underlying these results are deep structural tensions. On economics, today’s Republicans are—like Caesar’s Gaul—divided into three parts. Establishment conservatives reflect the interests of corporate America. They favor free trade, immigration reform, and well-targeted public investment. They are broadly internationalist and mostly support the treaties and institutions through which the United States exercises global influence.
They believe in climate change and can live with reasonable measures to abate it. They want corporate tax reform, but not at the expense of provisions in the current code that benefit their economic sectors. They would like individual tax reform but already can use the current code to minimize their effective tax rate. They believe in “entitlement reform” but would accept revenue increases along with it—the ever-elusive “grand bargain” at the heart of blue-ribbon commissions.
Second come the small-town, small-government conservatives who channel the anxieties and antipathies of the National Federation of Independent Business and whose sentiments pervade the Paul Ryan-House Republican manifesto, “A Better Way.” They believe—passionately—that government is the principal obstacle to growth. They insist on major tax cuts, especially in the individual code through which their unincorporated businesses are taxed, and fervently reject any new taxes.
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