Margaret Thatcher, who served as the British Prime Minister from 1979 to 1990, died this morning at the age of 87 following a stroke.
Thatcher is known, of course, for having led a conservative British resurgence. The NBC News report this morning noted, for example, "Thatcher transformed the British economy and took on its welfare state and powerful unions. Her government closed or sold state-owned industries, notably struggling steel plants and coal mines, to the private sector and radically cut taxes and public spending -- strong medicine, she conceded, but precisely what was needed to restart a stagnant nation. 'The problem with socialism,' she once said, 'is that eventually you run out of other people's money.'"
It's the kind of worldview that made Thatcher a hero, not only to Tories, but also to Republicans here in the U.S. As recently as June 2011, there were items like these from TPM arguing that the former British Prime Minister "has always been a popular figure in Republican circles across the pond, but she seems to have taken on new relevance in recent years for the party's leading lights." The piece added that Thatcher was even "casting a shadow" over the race for 2012 Republican presidential nomination.
There is, however, another angle to the Iron Lady's legacy.
While no one would dare characterize Thatcher as some kind of moderate, Bruce Bartlett wrote a fascinating New York Times piece in 2011 explaining that the former Prime Minister reduced British budget deficits, but did so in part by relying on increased tax revenue.
To those familiar with Mrs. Thatcher's tax policies, these data are not surprising. Although she cut the top personal income tax rate to 60 percent from 83 percent immediately upon taking office, the basic tax rate was only reduced to 30 percent from 33 percent. And in 1980, the 25 percent lower rate of taxation was eliminated so that 30 percent became the lowest tax rate.
More importantly, Mrs. Thatcher paid for her 1979 tax cut by nearly doubling the value-added tax to 15 percent, from 8 percent. Among those who thought Mrs. Thatcher was making a dreadful mistake was the American economist Arthur Laffer. Writing in The Wall Street Journal on Aug. 20, 1979, he excoriated her for taking with the one hand while giving with the other.
"The Thatcher budget lowers tax rates where they have little economic consequence and raises tax rates where they affect economic activity directly," he complained.
In the 1982 forward to the British edition of his American best-seller, "Wealth and Poverty," George Gilder was also highly critical of Mrs. Thatcher for failing to cut either taxes or spending: "The net effect of the Thatcher program has been a substantial increase in taxation on virtually all taxpayers."
Why would a conservative icon support tax increases? Because Thatcher, in addition to embracing a degree of pragmatism today's right finds abhorrent, was more interested in deficit reduction and balanced budgets than tax policy. She was, in other words, in line with the traditional fiscal priorities of the Republican Party before its supply-side revolution prioritized tax cuts above all.
What's more, let's also not forget that Thatcher championed the British system of government-run health care -- the National Health Service -- instead of trying to repeal or privatize it. Bartlett added, "[A]t the end of the Thatcher era, the welfare state was still intact."
Again, this is not to say Thatcher was some kind of centrist or the British version of a RINO, any more than these labels would apply to Reagan, who raised taxes seven of the eight years he was in office.
Rather, the point is, what constitutes a "conservative" by contemporary standards has moved so dramatically to the right that even the right's icons fail to meet their modern-day standards.
Update: Thatcher also believed in climate science and urged leaders around the world to address the climate crisis.