Back to opinion page.
America deserves a tax cutThe budget for fiscal year 1999 has passed, but the American people didn't get the tax cut they deserve. But while there is plenty of blame to go around, to both sides of the political spectrum, it is Bill Clinton and the Democrats who have the blood of this dead legislation on their hands.
One of the Democrats favorite arguments against a tax cut is that "we can't pay for it." This argument is false. Tax cuts do not need to be paid for. In fact, tax cuts pay for themselves, and have proven to actually increase revenue to the Treasury. Two historical examples illustrate this phenomenon. The first was President John F. Kennedy's tax cuts in the early 1960's, which stimulated growth and increased receipts. The second, of course, was President Ronald Reagan's tax cuts in the 1980's that nearly doubled tax revenue.
Look at the numbers. In 1981, tax revenue was $550 billion dollars, rising to $991 billion in 1989. This was after the top marginal tax rate was reduced from a ridiculous 70% to a more reasonable 28%. Reducing tax rates spurred economic growth, resulting in more revenue. The fact that we still had deficits in the 1980's is an illustration of how explosive the increase in spending was during those years. Jack Kemp and other proponents of tax reduction were ridiculed for saying we can grow our way out of a deficit. The current growth-inspired surplus proves Kemp right.
Not only is the argument that we need to "pay for" tax cuts false, it carries with it the arrogance of the liberal ideology that government can run our lives more competently than we can. The assumption behind the "we can't pay for it" line is that all money going into the government's coffers is rightfully the government's. It does not belong to the American people, who earned it in the first place. What the liberals are really saying is "No, I'm sorry, I cannot reduce the amount of money forcibly confiscated from you each year, Mr. Taxpayer. I must continue to take a large chunk of your income so I can spend it on what I think is appropriate."
The Republican Congress wanted to pass an $80 billion tax cut, a very low sum compared to overall revenue. Right now, the federal government takes in over $1 trillion per year. The proposed tax cut was less than 8% of overall revenue, yet Bill Clinton would have us believe it would bust the budget. What we actually must do is pass a much larger tax cut in order to spur economic growth. With the Asian markets in recession, the economy must be stimulated in order to protect the economic prosperity we have now. Without a tax cut to spur economic growth, the recession we are likely to endure and the revenue shortfall a recession brings with it will erase the budget surplus that was created by economic growth in the first place.
But there is a more basic reason why we must cut taxes now. That reason is simple fairness to the American people. We are not fighting a war. With the fall of the Soviet Empire, the massive military budgets required by the Cold War are no longer needed. But we still confiscate, under penalty of imprisonment, too much income from the American people. And it isn't just income taxes where we pay more than we should. That does not even count the alcohol and tobacco taxes, Social Security tax, Medicare tax, property tax, state and local income tax, sales tax, automobile excise tax, capital gains tax, and other taxes we pay. I would not be surprised if the overall tax burden for the average American family is over 50%. This is simply wrong.
On Election Day, we must vote for candidates who support lower taxes and that means voting Republican. "But Scott, didn't the Republican Congress back down on taxes? Why should we reward them for backing down"? Yes, the GOP Congress did back down, and it allowed itself to be put in a position where Bill Clinton could blackmail them with a government shutdown to kill a tax cut. However, we must also be realistic in our political activism and our voting. What that means is not that we should punish the Republicans, but that we should send more conservative Republicans to the House and Senate so they have more leverage in dealing with Clinton. See you at the polls.