NCPA - National Center for Policy Analysis

Controlling Tax Increases

December 16, 2002

It's a mystery to liberals why conservatives are so adamant about cutting taxes, says Bruce Bartlett. To them, the conservative fervor for tax cuts--anytime, anywhere--is irrational; it's almost a religious belief that is accepted on faith without any supporting evidence. In fact, tax cuts make perfect sense even if one does not think they will have any impact on growth whatsoever.

Conservatives believe that spending is the ultimate enemy, and it is fueled by higher taxes. In other words, government will always spend every penny it has, and more if it can. Therefore, what determines the size of government is its ability to take money out of its citizens' pockets.

The United States is a perfect example.

  • Prior to World War I, government spending as a share of the gross national product was less than 3 percent almost every year except during wartime -- but it's risen almost continuously.
  • By the mid-1960s, federal spending consumed 17 percent of the economy, and this year it is 19.5 percent, according to the Congressional Budget Office.
  • When one includes state and local governments, government at all levels now accounts for about 31 percent of national income.
  • Almost one out of every three dollars in the U.S. economy is spent by government.

Liberals would have us believe that they really don't favor tax increases. They just oppose further tax cuts, including the extension of expiring tax cuts.

However, as the CBO points out in a new report, failure to extend these expiring provisions will raise taxes on the American people by almost $1 trillion over the next 10 years. Thus, if Congress does nothing, taxes will automatically rise.

Source: Bruce Bartlett, senior fellow, National Center For Policy Analysis, December 16, 2002


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