Spence
11-06-2003, 08:17 PM
Most of you have probably heard of The Economist. For those who have not, it's one of the oldest magazines in the world. It's published in the United Kingdom, but most of its readers are in the United States. It's conservative. It supported the war in Vietnam, Ronald Reagan and even endorsed George W Bush in 2000. It does not look as if The Economist will be making that mistake again. Behold: A poll by ABC News and the Washington Post, published on November 2nd, showed that 53% of respondents disapproved of Mr Bush's tax policy. The large cast of Democratic presidential hopefuls claim Mr Bush's tax cuts have been a giveaway to the rich, wrecking the economy and mortgaging the future for America's children.
More sober analysts are also worried. In their most recent poll, members of the National Association of Business Economists described the federal deficit as the biggest problem facing America's economy. A bipartisan coalition of three economic think-tanks—the Committee for Economic Development, the Concord Coalition and the Centre on Budget and Policy Priorities—recently declared that, without a change in course, the next decade might be the “most fiscally irresponsible” in the country's history.
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Look closely, and Mr Bush is also much less of a tax reformer than Mr Reagan was. In 1986, the Gipper presided over the biggest tax reform in modern American history. The tax base was broadened and rates were lowered, but the overall tax burden remained unchanged. Although Team Bush wants a reformed tax code, aimed at consumption rather than income, their strategy of tax reform via tax cuts will not produce a clean reform. Many of the subsidies and loopholes of the current system will remain. The result will be a narrower tax base, full of distortions, which shifts the burden of taxation towards poorer Americans.
The other big difference with the Gipper is that Mr Reagan was not averse to putting up taxes when too much red ink appeared. Taxes were raised several times during his presidency. Congressional rules on deficit reduction were introduced during Mr Reagan's second term. So far, at least, Team Bush has shown no such flexibility. There is no admission that America faces a fiscal mess, and no shifting from the mantra that all tax increases, at all times, are bad.
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Long after Dubya is back on his ranch, Americans will be trying to recover from the mess he created. Those are the highlights. If you'd like more, read it all. (http://www.economist.com/world/na/displayStory.cfm?story_id=2189237)
More sober analysts are also worried. In their most recent poll, members of the National Association of Business Economists described the federal deficit as the biggest problem facing America's economy. A bipartisan coalition of three economic think-tanks—the Committee for Economic Development, the Concord Coalition and the Centre on Budget and Policy Priorities—recently declared that, without a change in course, the next decade might be the “most fiscally irresponsible” in the country's history.
...
Look closely, and Mr Bush is also much less of a tax reformer than Mr Reagan was. In 1986, the Gipper presided over the biggest tax reform in modern American history. The tax base was broadened and rates were lowered, but the overall tax burden remained unchanged. Although Team Bush wants a reformed tax code, aimed at consumption rather than income, their strategy of tax reform via tax cuts will not produce a clean reform. Many of the subsidies and loopholes of the current system will remain. The result will be a narrower tax base, full of distortions, which shifts the burden of taxation towards poorer Americans.
The other big difference with the Gipper is that Mr Reagan was not averse to putting up taxes when too much red ink appeared. Taxes were raised several times during his presidency. Congressional rules on deficit reduction were introduced during Mr Reagan's second term. So far, at least, Team Bush has shown no such flexibility. There is no admission that America faces a fiscal mess, and no shifting from the mantra that all tax increases, at all times, are bad.
...
Long after Dubya is back on his ranch, Americans will be trying to recover from the mess he created. Those are the highlights. If you'd like more, read it all. (http://www.economist.com/world/na/displayStory.cfm?story_id=2189237)