Democrats Don't Get It When it Comes to Cutting Taxes

December 4, 2002

Democrats are trying to come to grips with the tax issue, says Bruce Bartlett, but don't "get it." For example,

  • Former Clinton Labor Secretary Robert Reich favors exempting the first $20,000 of wages from the Social Security payroll tax for 2 years -- paid for by raising estate taxes.
  • And former Clinton economist Gene Sperling favors more tax rebates financed by freezing the portions of last year's tax cut that have not taken effect -- a net tax increase because the rebate would be temporary while the tax freeze would be permanent.

George W. Bush and the Republicans are driving the economic agenda. It was not always so. In the name of fiscal responsibility, Republican presidents used to oppose efforts by congressional Republicans to cut taxes, and often pushed tax increases to close budget deficits caused by Democrat spending. This gave Republicans the reputation of being tax collectors for the welfare state.

  • But during the 1970s, inflation pushed taxpayers into higher tax brackets, and because of graduated tax rates, revenues rose about 50 percent faster than inflation.
  • Finally, the middle class figured out that all this new spending never reached them, while tax cuts cost them nothing; thus opposing tax cuts is the same thing as asking for a tax increase.

Today, Republicans have been cutting taxes for more than 20 years and have gained credibility with voters. By contrast, the last Democratic tax cut was in 1964. Democrats have fought every tax cut since, imposed tax increases whenever they had the opportunity, and their leaders view last year's tax cut as the root of all evil.

Source: Bruce Bartlett, senior fellow, National Center for Policy Analysis, December 4, 2002.

 

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