The Dishonest Tax Cut Argument

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The Dishonest Tax Cut Argument
by James Hall, Associate Editor

May 1, 2002

"Leaning Left"

James Hall Why is a major political argument breaking out these days over a tax cut that won't even happen until 2011? That's the new argument broached by the Republican Party for 2002, who want to use fiscal irresponsibility to force Democrats to declare themselves against tax cutting. It's a dishonest argument because it ignores all talk of the consequences of further tax cuts, which will be federal budget deficits or cuts in government programs, or both.

Tax cutting made sense in the climate of budget surpluses, but those surpluses are now past us, both as a consequence of the economy and of the events of 9/11.

It seems doubly dishonest just now because President Bush, while campaigning to make his ten-year tax cut package permanent--something estimated to cause the federal budget another 5 trillion dollars in twenty years--is himself submitting record-breaking budgets to Congress for national and homeland defense and for pet projects like his faith-based initiative. And that's before he deals with his campaign promise to make Social Security solvent and create a prescription drug program for seniors.

Where do we get the money to do all the additional things that the President wants and still cut taxes? The current answer is a return to budget deficits. But the Republicans apparently don't care about fiscal responsibility. They've finally found an argument that works with the American people, illogical as it is.

For years Republicans tried to grasp the bull by the horns and argued for a limited government and reduced programs. Do you want more government? they asked.

Unfortunately for the them, the answer was a resounding "yes." Americans want their Social Security, their Medicare. Americans want a strong national defense, subsidized research and development, a space program, and Americans go for any program that helps them out, be it FHA loans or national student loans. And the giveaways are not just for the poor: there's corporate welfare, welfare for the rich and middle class via tax deductions. There's a government program for everybody, it would seem.

Americans want good roads, bridges and airports, want good weather prediction and law enforcement. Americans want the government to stimulate the economy when its down, and keep it running strong when it's up. They want it to solve the airline security problem, the immigration problem, and the pollution problem.

By asking a different question, Republicans are finally getting a response they like. They can drive up the budget deficit, slow down the economy, and blame it on too much government spending. Who could be opposed to less taxes, after all? Everyone wants something for nothing--or for less, at least.

But by framing the debate as over taxes, and not spending, Republicans are ducking fiscal responsibility. When Mr. Bush says, "It's your money," to a happy crowd, he's deliberately leaving out the consequence of cutting taxes without cutting spending: "It's your deficit, too--or your children's deficit to pay back."

In a perfect world, taxing and spending would be about individual government programs--is program A worth funding, and how do we fund it? Or can we spend less on program B and get results? Is program C worth raising taxes for? Any argument about cutting taxes would also be about cutting expenses. This is usually the way it works in state government, where the governor and legislature are together responsible for a balanced budget and must make the hard choices politically.

One certainly wouldn't cut taxes and increase spending as Mr. Bush wants to do, without accepting the obligation to pay down the budget deficit at some point.

But the word "deficit" just hasn't been on the mouths of tax-cutting politicians, who seem to think that the war on terrorism and the recent economic turndown justifies building one. That may be true for a tax cut this year, or the next, but cutting taxes in 2011? Leave that issue for those who are here, then. ***

Photo of the author courtesy of staff files