CRP Blog

Tuesday, April 15, 2008

On taxes, which party is in touch with Americans?

A Gallup poll released this week showed that 52% of Americans believe their taxes are too high, and only 2% believe they are too low. (We suspect the 2% are entirely confined to the cities of San Francisco and Berkeley, plus Alec Baldwin. We're tracking that down.) The important issue, though, is which party is in touch with the American people when it comes to taxes.

The Democrats in Sacramento and Washington continue falling all over themselves to try to raise taxes, and they always have a reason. They should. Lots of groups in their big-government coalition are dependent on more money from the government, so they no doubt put lots of thought into reasons why taxes should be higher, and by extension, why their piece of the pie gets bigger.

Some of the most common reasons Democrats throw around to justify (another) tax increase include:

- Making the tax code "fairer." This was Bill Clinton's big justification for the largest tax hike in history, passed in 1993. I was in Washington at the time and read the Clinton Treasury Department summary of the tax hike plan, with the increases refered to as "measures to improve the fairness of the tax code." Fairness, of course, means that someone needs to pay more, not that anyone needs to pay less.

- "The budget deficit." The Federal Government has been accumulating debt for most of its existence. There's always a budget deficit because government's interest in doing this or that pretty consistently outstrips available resources. Rosy revenue forecasts are used to spike spending, and then when the revenues fail to materialize, viola!, we need a tax increase.

- The government needs to do more of (insert lofty program here). Setting priorities is difficult, particularly for many in political office, because it means someone's program is going to be a high priority, and someone else's is going to be deemed as low priority (the California Tomato Board comes to mind). And the advocate for the low priority program is going to be upset, and their PAC will look for someone to run against you in the primary, or in the general election, etc. The risk to taxpayers is the political path of least resistance can lead to a tax increase so everyone's government program can continue to grow.

- "We" need to "fully fund" (name of program). This is the classic moving target used to argue concurrently for higher spending and against any kind of tax relief. Liberals consistently use the term to justify more spending on whatever program is on the agenda that day. (Interestingly, I can't recall hearing a liberal ever apply the term to "fully funding" our troops in the field, or the Defense Department). The hypocrisy of the "fully fund" argument is exposed when it's clear that the term is never, ever accompanied by a dollar amount. So, how many billions would "fully fund" (name of program)? You're not likely to get an answer, because the term is simply used to justify "more."

In Washington, President Bush deserves enormous credit for making any kind of tax increase the House or Senate Democrats can dream up DOA. President John McCain has similarly committed to not only opposing tax increases, but to vetoing any bill with earmarks, recognizing the need to get federal spending under control.

Here in California, Governor Schwarzenegger and our Republican legislators have been similarly correct for focusing on bringing spending in line, instead of heeding the special interests' call for even higher taxes.

Finally, there's the issue of reforming the way government operates in order to do more without further burdening the taxpayer. Anyone who has seen government procurement or personnel management in action knows that government must be one of the least efficient organizations ever conceived, meaning there is often plenty of room for improvement. In Washington, for example, President Bush's "Management Agenda" is leading federal agencies to improve service while cutting costs. Governor Schwarznegger's 2004 California Performance Review simialrly lists ways California government can be improved.

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