Libertarians Have Radical Plans for Your Money—and May Sway the Election

With its borrowings from the left and the right, the Libertarian party and its presidential nominee, Gary Johnson, may have an impact on White House race this fall. While it has next to no chance of winning, its rising appeal might affect the race.

Would the Republicans or Democrats benefit? Hard to say, because in an unusually polarized year, the Libertarians’ ambidextrous appeal could draw disaffected voters from either side.

“We’re fiscally conservative and socially liberal,” says Johnson, 63, who served two terms as the Republican governor of Democratic-dominated New Mexico. For instance, he wants to radically overhaul taxes and keep legalized abortion. If the Libertarians did win, he would drastically change the economic status quo in a way that would please the right end of the political spectrum.

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The Libertarians typically get about 1% of the popular vote. But this year, the dual-personality party has a decent chance of scoring in the mid-teens.

That’s because the two major party nominees—Hillary Clinton and Donald Trump—have big negative ratings in the opinion surveys. And it’s also because both parties have become more ideologically purist (although Trump has some unorthodox views for a conservative, such as his opposition to free trade). Flawed candidates and political polarization may leave a lot of voters searching for an alternative.

The latest RealClearPolitics average of nine national opinion polls finds that Johnson sits at about 8% of the vote. Green Party contender Jill Stein is at 3%. Most polls you read measure just Trump vs. Clinton. But when the surveys include Johnson and Stein, as measured by RealClearPolitics, Trump’s and Clinton’s numbers each drop by four percentage points.

Some polls show Johnson in the low teens. If he clears 15%, he would be allowed into the televised national debates. (His current scores are a big improvement from the 1% he tallied in the November 2012 election balloting, when he first ran as the Libertarian candidate.) In the past, third-party candidates occasionally have had an influence on the vote, particularly George Wallace in 1968 (helping Richard Nixon) and Ross Perot in 1992 (aiding Bill Clinton).

But in the end, national vote totals are of secondary importance. Who takes which crucial state, in terms of electoral votes, is what matters. Johnson could sway the election by siphoning off enough support from Clinton or Trump to swing a battleground state.

The Wall Street Journal/NBC/Marist poll of battleground states has Johnson with respectable showing in four battleground states: Colorado (12%), North Carolina (9%), Virginia (12%), and Florida (9%). Of these, Florida is the top prize: Its 29 electoral votes make it—along with Democrat-heavy New York, which has the same number—the third largest trove. No. 1 California (55 electoral votes) is an almost certain Democrat win, and No. 2 Texas (38) is thought to be in the bag for the GOP.

If Clinton and Trump repel many voters, Johnson at least comes across as likable and articulate, and disarmingly goofy. In an appearance on Samantha Bee’s TV show, Full Frontal, the rubber-faced Johnson, former CEO of legal marijuana distributor Cannabis Sativa (Libertarians are for legal pot), made faces and wisecracks. At one point, he made an animal noise. “I think you’re too freaky-deaky to be president,” Bee said.

The Libertarians’ curious mix of conservative and liberal positions can induce ideological whiplash among voters used to the hardline liberalism and conservatism of the major parties. The libertarian stances that tilt to the left are less directly oriented toward your wallet. Examples: in favor of gay marriage, against government snooping, and skeptical about military interventions.

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If Gary Johnson were to win, these are the pocketbook issues he would push:

Replace the tax code with a single flat rate. To Johnson, and Libertarians in general, the best course is to wipe out the personal and corporate income taxes, and abolish the Internal Revenue Service. As is, the tax laws are so complicated that they distort economic growth, Johnson argues.

The candidate wants to replace the multi-tiered U.S. tax system with a single flat rate of 23% on consumption, a sort of national sales tax. Thus, the plethora of tax deductions would be a memory. That way, the reasoning goes, there would be no need for an IRS to oversee tax collection because it would be so easy. Johnson predicts that simplifying the tax law would lead to an explosion of economic activity.

At first blush, the flat tax likely would help the wealthy more. The reason: Low-income people spend a greater portion of their income on retail goods and services than the wealthy do. Under the Johnson plan, however, the hit to the poor would be at least partly counterbalanced by what’s called a “prebate.” That’s where the government sends a check to all households to offset the taxes on consumption. Although it’s unclear how much that would be, Johnson says his aim is to make low-income folks end up with a net tax of zero.

By the Tax Foundation’s reckoning, the 23% rate would not bring in sufficient revenue to fund federal outlays. “While you’d get a strong economic gain from eliminating the tax code’s distortions, the effect would not be big enough” to cover the shortfall, says Scott Greenberg, an analyst at the organization. Right now, Washington spends around 18% to 20% of gross domestic product, but the Tax Foundation calculates the Libertarian flat rate would bring in just 16%.

Slash government spending. Johnson seeks to balance the federal budget, which would mean cutting spending by around 20%. Three agencies he’d abolish are the Departments of Education, Commerce, and Housing and Urban Development. He talks about how national debt approaching $20 trillion would bankrupt the U.S.

The risk here is that lower federal outlays could harm the economy, especially during a recession. (Classic Keynesian strategy holds that, because the downturn crimps government revenue and the jobless need help, Washington should borrow more to make up the difference.)

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There’s broad concern among economists and government officials that Social Security and Medicare are headed for insolvency due to an aging population. Johnson does not call for ending these systems, instead suggesting that some of Social Security be privatized—that is, that taxpayers be allowed to invest their portion of future proceeds in the stock or bond markets, or leave the money with the government.

When George W. Bush was president, he pushed a similar plan, which met with fierce opposition on Capitol Hill and was abandoned. Johnson has said one solution to funding woes is to increase the eligibility age for Social Security, up from the current level of just over 66.

Shrink federal regulation. Libertarians believe that an overweening government stifles risk-taking and economic growth. Johnson advocates ending federal minimum wage requirements, which he considers to be a drag on businesses, the engine of prosperity. Hillary Clinton wants to increase the mandated level to $15, from the current $7.25.

In the same vein, Johnson is against Obamacare, which requires that Americans without health care sign up for this program or pay a fine. And while he is not a denier of climate change, he feels that government efforts to combat it are largely wasteful and wrongheaded. On trade, he is against tariffs and other barriers to international commerce, a position that puts him at odds with his two major party opponents.

Certainly, Johnson doesn’t go along with some of the more radical views of the segment of the Libertarian Party that he calls “bat sh** crazy.” For instance, he believes in keeping the Environmental Protection Agency. At the party’s May nominating convention in Orlando, he drew boos from more devout Libertarians over the subject of requiring drivers’ licenses. He was in favor of them.

Who knows whether the Libertarians’ two-flavored approach will expand their vote this year? The bigger question is whether it will affect the Trump-Clinton outcome.