Tax Cuts

Sad to say, the New York Times editorially called for increasing our tax burden even before President Reagan’s economic program went into effect. “Is there any way to avoid balancing the budget on the backs of the poor?” the paper inquired on September 20. And replied: “Yes: Higher taxes. No one has as yet gotten a penny of the new income-tax cuts. If they were just phased in more slowly, taxpayers would still see some benefit.”

As news accounts in the past few weeks have made abundantly clear, most journalists still don’t understand the most important part of supply-side economics. At the heart of the problem lies the phrase “tax cuts.” It seems harmless enough. But it is not “tax cuts” that we shall experience on October 1. It is tax-rate reductions—very small reductions, too, at the outset. Rate reductions don’t begin in earnest until next July 1.

TB

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Tom Bethell

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Sad to say, the New York Times editorially called for increasing our tax burden even before President Reagan’s economic program went into effect. “Is there any way to avoid balancing the budget on the backs of the poor?” the paper inquired on September 20. And replied: “Yes: Higher taxes. No one has as yet gotten a penny of the new income-tax cuts. If they were just phased in more slowly, taxpayers would still see some benefit.”

As news accounts in the past few weeks have made abundantly clear, most journalists still don’t understand the most important part of supply-side economics. At the heart of the problem lies the phrase “tax cuts.” It seems harmless enough. But it is not “tax cuts” that we shall experience on October 1. It is tax-rate reductions—very small reductions, too, at the outset. Rate reductions don’t begin in earnest until next July 1.