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Tuesday, August 03, 1993 Page:
Rather than raise taxes,
enact spending controls
Is it “gridlock” to oppose the biggest tax hike in American history?
Is it “stonewalling” to note that tax increases punish productive workers
—
eroding incentives to save, work and invest, and encouraging people to use
shelters and other dodges to hide their income?
(Remember, the Clinton administration also has proposed a gas tax and is
considering a cigarette tax, in both cases to deliberately discourage
consumption. Rational human beings will respond the same way to a higher
income tax: They’ll change their behavior to avoid paying the tax as much as
possible.)
Is it “foot-dragging” to point out, as the Heritage Foundation has, that
periods of extraordinary economic growth in the United States — the 1920,
1960s and 1980s — all followed steep cuts in income-tax rates, while tax
hikes in the 1930s, 1970s and 1990 led to stagnation?
Is it “filibustering” to note that higher tax rates tend to bring lower tax
revenues? Higher taxes cause such a dramatic change in people’s behavior that
the Clinton tax hikes will likely bring in only about one-fourth of the
revenue that the administration is counting on, Harvard economist Martin
Feldstein predicts.
Is it “throwing sand in the gears” to remind the president that a massive
tax hike simply was not part of the “New Democrat” platform he campaigned on
— and that it’s not gridlock, but his betrayal of those principles and
promises, that is causing his problems with Congress and the American people
today?
Is it “spinning our wheels” to point out that higher taxes hurt small
businesses and discourage job creation? Is it “going nowhere” to doubt that
Congress will match the higher tax rates by cutting spending, when, according
to the Joint Economic Committee in Washington, D.C., for every dollar of new
tax revenue between 1947 and 1990, federal spending grew by $1.59?
No?
We don’t think it is, either.
President Clinton can learn these lessons the easy way or the hard way. The
easy way would be to bow to Congress’ deep mistrust of his budget — and to
submit a new budget, one that leans far more heavily on spending controls than
it does on tax hikes to reduce the deficit.
The hard way would be to push through the budget as is. For if that
happens, the economy will almost certainly sour — and the Democrats will lose
the White House, to a chorus of “I told you so’s” that’ll keep the party out
of power another 12 long, long years.