Bruce Bartlett has an interesting perspective at National Review Online on when and how the next round of tax increases will be foisted on the American public. First, he reviews the legacy of that famous tax-cutting President, Ronald Reagan.
The year 1988 appears to be the only year of the Reagan presidency, other than the first, in which taxes were not raised legislatively. Of course, previous tax increases remained in effect. According to a table in the 1990 budget, the net effect of all these tax increases was to raise taxes by $164 billion in 1992, or 2.6 percent of GDP. This is equivalent to almost $300 billion in today’s economy.
Then, he looks at how past tax increases have been foisted on the US.
But when all the political and economic elites of this country gang up on a president to raise taxes, history shows that they always get what they want. Indeed, they were even able to get Bush’s father to raise taxes in 1990, even though his political advisers knew that it would likely lead to his defeat in 1992, which it did.
How do the elites break down presidential resistance to tax increases? They do so by promising the moon. Tax increases, they say, will lead to huge reductions in interest rates, which will power economic growth and reduce unemployment. The rich only pay them anyway, which makes the president look like a populist. And tax increases are the price that must be paid to get spending cuts.
This last point is especially laughable.
Actually, all the points are laughable, but the last one is the worst. Giving someone who is overspending a big raise is the best way to cut back on their spending, right? How dumb do they think we voters are?
Pretty dumb, obviously. Too bad the voters as a class don’t do anything to prove them wrong, like voting the duplicitous bastards out.
The article ends by noting that:
It will be interesting to see how Bush reacts when his staff tells him that taxes need to be raised.
Very interesting indeed. President Bush has shown no spine whatsoever on domestic issues, with the sole exception of his tax cut. I will predict that he stood up for his tax cut because his father lost his reelection bid due to a tax increase. After next year’s election, when he is in his final term (assuming he wins), I don’t see any reason to believe that President Bush will resist the pressure for a tax increase.