What ejaculation scenes are to porn producers, tax cuts are to Republicans; no matter what the story line, they'll find a way to work it in. In the increasingly-fractious GOP, tax cuts are sometimes the only issue upon which the party can agree. Even the Democrats, who are seemingly taught in the cradle that tax cuts are a Bad Thing, are starting to come around, although they are careful to point out that they're not going to let cutting taxes get in the way of their spending plans.

Perhaps needless to say, the prospect of federal budget surpluses over the next decade or so has cranked up the volume on this particular issue, and the Republicans have come up with a plan that returns, they say, $792 billion to the taxpayers over the next decade, including 10 percent across the board, 25 percent off the capital-gains rate, the elimination of estate taxes, and adjustments to deductions that eliminate the so-called "marriage penalty". To cement the deal, the GOP is also calling for a "lockbox" program to earmark much of the remaining surplus for the Social Security trust fund — a device to forestall Democratic complaints.

Some Democratic complaints, anyway. The Clinton administration grouses that the Republican plan doesn't allow for any, er, spending flexibility, and the usual noises about how the GOP is in thrall to the rich are being made. I am of two minds about this latter point. My annual tax bill is around $6,000; it perturbs me not at all that someone who is paying $60,000 would get more dollars back than I would. On the other hand, I'd hate to see the estate tax go away entirely, if only because there seems little benefit in rewarding the next generation for its fortunate choice of ancestors. [Insert joke about rich kid with trust fund here.]

If the Democrats really wanted to derail this plan, though, they'd point out that all the speculation about future surpluses is just that: speculation. The Congressional Budget Office is not necessarily partisan, but its assumptions about the future federal cash flow are not necessarily self-fulfilling prophecies either. Of course, were the Democrats to argue that the projected surpluses might not actually appear, it would look bad for them to continue to argue for increased government spending. So the Clinton administration, following its usual bent, is calling for targeted tax cuts — "targeted", in Democratic parlance, meaning "aimed at our particular constituencies" — and not especially large ones at that.

For my part, I don't see why these things have to be projected over an entire decade. Let each fiscal year end in September, and if there's a surplus for that year, rebate some of it in the form of credits the next year. It will put additional pressure on the Congress and the President to keep spending within limits, and it will eliminate a lot of the political posturing about tax cuts. Don't look for this in my lifetime.

The Vent

#162
22 August 1999

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 Copyright © 1999 by Charles G. Hill