What are the political risks and rewards of tax cuts?

As Tory Diary notes over at ConservativeHome, Fraser is making the running on the tax cut issue. His Spectator columns and Coffee House posts have pointed UK political strategists in the direction of Obama’s tax-cutting proposals and their centrality to the President-elect’s campaign. The FT’s story on Saturday made it unambiguously clear that Brown was cooking up a pre-emptive strike – and so it has proved, with details to follow tomorrow.

Over at Comment Central, my old friend and associate Danny Finkelstein has been leading the counter-charge, beating up poor Nick Clegg as a proxy for the growing number of Tories arguing for a shift of position. I think the phrase “punk tax cuts” is brilliant and should enter the blogger’s lexicon. It also reflects Danny’s personal experience of what it is like to be a Tory arguing for tax cuts and the peculiar toxicity of tax cutting proposals when they are put forward by the Conservative Party.

Is the issue as toxic as it once was? Since the 1997-2001 Parliament, the mods have been arguing for caution, and pressing the party to put electoral reassurance first. But the counter-argument – which must at least be addressed – is that the conspicuous failure of Brown’s public spending spree and the impact on families of the downturn have changed the terms of trade. According to this point of view: voters no longer automatically associate public spending with virtuous “investment” and are becoming ever more receptive to tax-cutting proposals as they feel the pinch. Is that analysis correct, or a triumph of hope over experience?

I take it as read that CoffeeHousers would like to see taxes cut. And we all know the well-trodden arguments that distinguish fiscal conservatives from Reaganites. But I am interested in what you think about the political risks and rewards of a more radical Tory strategy. Where does the greater peril lie: in a new approach embracing tax cuts wholeheartedly or in the status quo, with Brown and Darling threatening to overtake Cameron and Osborne on the inside lane? Over to you.