Politics & Policy

Distract, Tax, and Spend

Democrats are poised to reverse over a decade of Republican tax relief.

While most of the media were busy covering the latest developments on the Iraq funding bill or the bipartisan immigration proposal, congressional Democrats on Thursday quietly passed a budget creating the framework for the largest tax increases in American history.

Until Thursday, the largest tax increase had been in 1993. That’s when Bill Clinton proposed a monstrous budget that even he would later admit had contained too many tax hikes. The Democrats lost the House of Representatives the following year for the first time in half a century. Clinton, speaking at a Texas fundraiser soon after Election Day, pinned the blame squarely on the hikes: “It might surprise you,” he said, “to know that I think I raised them too much too.”

Despite what happened to Democrats as a result of that tax hike, the budget they submitted their first year back in control of both houses of Congress — and pushed through Thursday on a party-line vote — provides a framework for tax hikes a full three times larger than the one that put them in the minority back then. This budget reverses more than a decade of Republican tax relief. It means a tax hike on every single American — working, retired, rich or poor — and, even as it aims to raise nearly $1 trillion with new taxes, does absolutely nothing to rein in spending or shore up an entitlement system badly in need of reform.

Everyone takes a hit. Forty-five million working families with two children will see their taxes increase by nearly $3,000 annually. They’d see the current child tax credit cut in half — from $1,000 to $500. The standard deduction for married couples is also cut in half, from the current $3,400 to $1,700. The overall effect on married couples with children is obvious: Far from shifting the burden onto the wealthy, the Democratic budget drives up taxes on the average American family by more than 130 percent.

Seniors get hit hard too. Democrats like to crow that only the richest one percent of Americans benefit from the stimulative tax cuts Republicans passed in 2001 and 2003. What they rarely mention is how much seniors benefited from those cuts in the form of increased income as a result of lower taxes on dividends and capital gains. More than half of all seniors today claim income from these two sources, and the Democratic budget would lower the income of every one of them by reversing every one of those cuts.

The great untold story of the post 9/11 period is the recovery of America’s will to fight on, despite new threats, and build an even stronger economy, a stronger America than before we were hit. A Republican Congress gave the American people the tools they needed to help themselves — and then got out of the way. We eliminated the marriage penalty and doubled the child tax credit. We created a tuition tax credit and put the death tax on the road to extinction. We slashed the tax on capital gains and dividends.

Americans took care of the rest, unleashing a flood of economic activity that’s still lifting the tide for tens of millions of working families and retirees. Despite 9/11, despite a recession, despite Katrina, despite a war, the American economy soared. China may be one of the world’s fastest growing economies. But its entire Gross Domestic Product is less than our net economic growth in the five and a half years since 9/11 alone.

The Democrats sounded a thrifty tune in the run-up to the November elections. They know about the tax-and-spend stereotype, so many insisted things would be different this time around. But budget season is always the most telling time of year on Capitol Hill. And as Democrats on Thursday advanced the largest tax hike in history, the story they’re telling is this: The party of tax and spend is back, with a vengeance.

U.S. Sen. Mitch McConnell (R-Ky.) is the Senate Republican Leader

Members of the National Review editorial and operational teams are included under the umbrella “NR Staff.”

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