Three Cheers for the Tax Cut
the weekly Standard Three Cheers for the Tax Cut Nothing more displeases respectable Washington opinion than politicians using money to their own advantage. And respectable opinion is mighty...
...It is right there, like a big red pimple on deficit reduction's handsome nose, in the budget reconciliation measure the Senate will shortly debate...
...The new, improved Clinton now favors individual and business tax cuts very much like those proposed by the Congressional leadership . . . only smaller...
...And yes, it is a betrayal of his party's long-established principles-a "mortgaging of future revenues for near-term votes," as the Post's editorialists contemptuously put it...
...But shell-shocked by last November's election and the national revulsion against liberalism it signaled, they're ashamed and afraid to say so...
...Most of them still do...
...By far the largest proposed Republican tax cut goes to families with children, and is currently capped (in the Senate) at individual incomes of $75,000, which means the vast bulk of it will go to people well within anyone's definition of "middle class...
...And a more Republican Congress in 1997 can then get started on better-and deeper-tax cuts in the future...
...The money that people were allowed to earn and keep was not really theirs at all, in fact, but merely federal "aid"-the Post's unintentionally revealing term for the higher-education credits and deductions included in the Republican tax package...
...Add to that very basic institutional hindrance the Republican leadership's pledge to balance the budget in seven years, which unavoidably squeezes the pool of money available for tax relief...
...The Republican Senate majority is still too small to sustain more than a few key defections, let alone block Democratic filibusters or override presidential vetoes...
...Humbling himself before an audience of $1,000 donors in Houston last week, he even (partly) apologized for raising taxes...
...We wouldn't be too put out, in fact, if, at some point during the next few weeks' highwire maneuvering over vetoes and debt-ceiling extensions, Speaker Gingrich and Senator Dole simply called Mr...
...If secret ballots were possible, it would pass Congress easily...
...And according to every available independent analysis, the administration's own proposed cuts in this area, despite being $10 billion a year less stringent, would be practically indistinguishable to current beneficiaries...
...Clinton wants to hang on to as much of it as he can to preserve pet initiatives like Americorps and the giant social programs that buy off traditional Democratic constituencies...
...A just and efficient American polity was thought impossible without a giant federal executive to redistribute wealth and establish social arrangements "correctly...
...But the rich-bashing is just talk...
...Fine...
...It involves a relatively small amount of money...
...If Congress manages to make its coming tax cut retroactive, or works to ensure that tax withholding tables are adjusted to produce larger paychecks beginning in January, then voters will get more money in their pockets early, well in advance of next November's election...
...The child credit itself is a departure from the purist thinking of economic conservatives, who usually prefer straight rate reductions to credits and exemptions...
...Medicare, incidentally, the Republican spending cut that most "alarms" the White House, is a program devoted exclusively to the nation's wealthiest age demographic, the elderly...
...It wasn't that taxes were too high...
...That money belongs to the people on the ground...
...He tries to keep them smaller by hollering that larger cuts-and the deeper spending reductions that make them possible-will unfairly advantage "the rich...
...There shouldn't be any tax cut at all," because "the more you cut taxes, the more you have to cut spending if you propose to balance the budget," thus jeopardizing the government's "future ability to pay for health care, housing assistance and all the rest...
...Bad" and "indiscriminate...
...Grundy is appalled...
...Democrats used to believe in it...
...Only a little...
...Cynical...
...And budget deficits were regrettable only insofar as they damaged government's ability to spend more...
...The $75,000 income limit on the child credit pays unfortunate deference to a central tenet of liberalism: the idea that beyond some arbitrarily determined level of economic success, money earned is not the legitimate property of those who earn it...
...This will make them happy...
...They will vote Republican...
...But the perfect conservative tax cut was never in the cards this year...
...The vulgar politics of it all...
...And there are other disappointments, most notably the fact that the tax and spending cuts now heading for final congressional votes are not even bigger...
...Better for conservatism's long-term, limited government principles that as much of it gets dropped next year on as many of them as possible...
...Senate Republicans, hang it all, have refused to abandon the $245 billion tax-cut bargain they made with Speaker Gingrich earlier this year...
...the outcome is good for the country, after all...
...A "huge mistake," scolds the Washington Post editorial page...
...That central Republican campaign promise of 1994- the first major reduction of federal taxes on individuals and employers in almost 15 years-still lives...
...And add to that a forgivable Republican uncertainty about exactly how far and fast last November's tax-and-spending-cut mandates might popularly be pursued...
...We think they're right...
...Conservative principle has not gone undented...
...Which is why the Post's bony, accusing finger wags most ferociously at the White House, not Capitol Hill...
...So candid an expression of big-government-ism is rarely heard these days...
...And it is a provision that the White House appears not to reject on ideological grounds, since according to news accounts that have never been denied, the Treasury Department is busily developing a cap-gains proposal of its own...
...And respectable opinion is mighty displeased just now...
...But he also wants to sign a middle-class tax cut-or at the very least not to be implicated in its defeat...
...But what do they expect of the man...
...Awful," even...
...True, Republicans have made political accommodations of their own...
...They think it is correct both for Republican careers and for the future of conservative tax reform...
...The problem was simply that debt service absorbed too big a percentage of tax revenues-money that should otherwise have been spent on a thousand different federal programs...
...Still, the Republican leadership's political judgment-they are politicking every bit as thoroughly as the White House, let's face it-is that a large-scale tax cut is the correct result...
...Sure, our friends at the Post would complain even more bitterly that the White House and congressional Republicans were conspiring to "fly an airplane across the country" and simply "drop the money...
...Another word for this thinking is "liberalism...
...Voters hate taxes, and conservatives betray no principle by reducing them-in almost any form...
...Granted, President Clinton has performed an astonishing rhetorical volte-face this year, repudiating in every essential respect the theory that informed his enormous 1993 tax increase...
...He is Bill Clinton...
...David Tell, for the Editors...
...They could give up all the business provisions they've proposed, and offer to devote the entire $245 billion tax cut to individual taxpayers...
...The one totemic "tax cut for the rich" in the Republican plan, a capital-gains tax reduction, is also that plan's strongest economic-growth initiative...
...It is middle-income tax revenue that fuels federal spending...
...Mortgaging things for near-term votes is what he does for a living...
...It was, once upon a time, Washington's official philosophy...
...The first and highest claim on money earned privately belonged to the government, which would better spend it publicly...
...Yes, it is an inelegant, comical pirouette he's dancing...
...If there were no "tax cut for the rich" to fight about-if only for the next few months-the president would be left with almost nothing to say...
...He is running for reelection next year...
...Clinton's class-warfare bluff...
Vol. 1 • October 1995 • No. 7
