|
 arlier
this week, Sen. Kent Conrad, the left-wing senator from North Dakota,
said that if the surpluses continue to disappear, we may have to
start looking at “revenue options.” Well, there they go again. “Revenue
options” is one of those lovely Washington euphemisms for “tax increase.”
Question:
What kind of an economic illiterate would call for a tax increase
just as the economy is tanking? This is about as sane as lighting
a blowtorch in a munitions factory. And folks, this is the man that
the Democrats have chosen to run the Senate Budget Committee. Even
most left-wing economists would denounce a tax hike as ludicrous
given the precarious nature of the nation’s finances.
Though not
all. In the August 28th Washington Post, Bob Kutner provides
another dose of boneheaded advice to deal with the shrinking surplus:
First, repeal the Bush tax cut to regain the lost surplus, he says,
then increase government spending as much as possible to pump up
growth. This is a demented bit of logic we have here. Kutner says
that giving people like you and me a tax cut so they can we spend
it on what we want to is economically depressing, but letting Hillary
Clinton and Robert C. Byrd spend those same dollars on government
programs is a wise investment in the future and an economic stimulus
to boot. Of course, if Kutner’s prescription were right, the economy
would be soaring and the Dow Jones would be surging into the 20,000
territory. Federal spending this year is already sprinting along
at a nearly 10 percent growth pace.
This rush
by Democrats to raise taxes is the first good news that Republicans
have had in weeks. As the economy slows, Democrats are so thirsting
for more revenues that they’re now publicly endorsing tax hikes.
Since, the Bush tax plan is now the law of the land, repealing it
would require raising taxes on at least 75 million people. By all
means, let them run in 2002 on that message populist message.
The Democrats
are also fiscal hypocrites when it comes to the tax issue. The Capitol
Hill newspaper The Hill reported last week that the vast
majority of the Democrats who opposed the Bush tax cut are intending
to cash their rebate checks rather than send it back to the Treasury.
One congressman was quoted as saying: “I have bills to pay.” I only
wish he could feel my pain.
The tax rebate,
which has caused the surplus to shrink by $40 billion this year,
was originally the Democrats’ own idea. In fact, when the White
House sent out letters reminding voters that the tax-rebate checks
were thanks to George W. Bush’s commitment to tax relief, Democrats
howled to high heaven in protest, charging Bush with hogging all
the credit. Tom Daschle originally wanted to widen the tax rebate
to 35 million Americans who don’t even pay taxes. Now he and his
colleagues are threatening to cancel the tax cut that they still
say they wanted to go to more people.
The Democrats'
fuzzy tax logic goes further back than that. During the presidential
campaign Al Gore and the Left’s spin machine complained that the
Bush tax cut would “overheat” the economy. Then when it became clear
earlier this year that the economy was on rocky ground, an army
of left-wing economists said the slowdown would be over before any
tax relief could possibly arrive. There is always an excuse with
these folks not to cut taxes. Then in the first months of this year
Dick Gephardt thrashed the White House for “talking down the economy”
to build support for the tax cut. Now, with the economy and the
stock market reeling worse than ever, logically they should be in
favor of an even larger tax cut rather than repealing the meager
one we just got.
Nothing would
better aid Republicans in regaining their political balance than
a clash over whether taxes should be raised or lowered. Now that
the Democrats have staked out their position, Republicans need to
counter with an entirely alternative vision: one that includes a
big plate of growth enhancing tax cuts. The shrinking surplus is
a result of slow growth. Slow growth is a result of a tax anchor
on businesses and workers that still hasn’t been lifted. Liberate
the economy from that burden and the economy will rise back to life
and the surplus will again surge. Mitch Daniels is the one (and
perhaps only) administration top dog who has this story right: The
surplus is a consequence of economic growth, not the cause of growth.
There’s one
problem. Republicans have not articulated a comprehensive economic
recovery tax plan containing capital-gains relief, genuine death-tax
repeal, and business tax incentives to encourage capital investment
and hiring. There is nothing to counteract the Daschle-Gephardt
agenda of higher taxes and fattened government. The Democrats have
an economically debilitating game plan to resurrect the economy.
But at least they have a plan.
|
