The Tax Issue Has Lost Its Fizz
February 15, 2000
Oddly, tax cuts have not been as important an issue this year as in previous presidential campaigns, says David S. Broder. Yet, as a Heritage Foundation briefing paper notes, for the average household, "taxes now exceed the cost of food, clothing, shelter and transportation combined....Federal taxes have climbed to their highest level since World War II and now consume more than 20 percent of national economic output."
A plausible explanation for the fading of the tax issue is provided by Bruce Bartlett of the National Center for Policy Analysis, writing in Heritage's Policy Review.
- There is growing evidence, says Bartlett, that the public sees budget surpluses and the prospect of a lower national debt as "de facto tax cuts."
- Since the debt represents a future claim on taxpayers' incomes, the lower the debt, the more they can spend and the less they have to worry about saving.
- Furthermore, the growing wealth of the country has cushioned the effect of rising taxes: "As long as net worth keeps rising at healthy clip," says Bartlett, "people will probably remain relative unconcerned about rising taxes."
Finally, the share of the tax burden that falls on the wealthy has increased -- so that the top percent of earners now pay more than half of federal income tax revenues. But even the wealthiest have seen marginal tax rates and capital gains levies fall, compared with 1980.
Thus, the tax issues doesn't pack the same wallop as in previous years.
Source: David S. Broder, "Why Tax Talk Falls Flat," Washington Post, February 13, 2000.
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