Bigger Is Better

...Second, it would provide a striking contrast to the Democrats' far smaller $900 billion ten-year tax cut, announced by minority leaders Tom Daschle and Dick Gephardt two weeks ago...

...An even bigger danger is that it might pass a tax cut so diluted of economic growth incentives as not to revive a sluggish American economy...

...Yet in recent weeks the sound bites from the administration and key congressional Republican leaders have promoted the Bush tax plan and not one penny more...

...But the Reagan and Kennedy tax cuts sliced the top rate by 20 and 14 percentage points, respectively, in the first year...

...The Bush tax plan must not be compromised away to accommodate the left wing of the GOP...

...George W. Bush needs to pull a page out of Bill Clinton's playbook...

...After three years it trims the top rate from 39.6 percent to 33 percent...

...Even if the Social Security and Medicare "trust funds" are declared untouchable, we still have a $2.7 trillion operating surplus—$1 trillion more than the tax relief the White House is offering...

...What we are now in danger of is a ceiling, not a floor, on the tax cut...

...Treasury secretary Paul O'Neill told a House tax committee on February 13 that he should be fired from his job if the tax bill's price tag exceeds Bush's offer...

...The way to calculate the supply-side effects of a tax cut is to compare the after-tax return on an extra dollar of economic activity before and after the change...

...Beyond that, Bush and congressional Republicans need to nail down their tax cutting credentials and place the shadows of 1990's tax hike behind them once and for all...

...Senate Finance Committee chairman Chuck Grassley pledges that no tax bill will get through his tax writing committee with a cost of more than the $1.6 trillion marker established by the White House...

...Republicans must also resist the temptation of using Keynesian rhetoric to sell tax cuts...

...we need a much bigger tax increase than I campaigned on...

...Supply-siders often point to the tax cuts in the 1960s under JFK and in the 1980s under Reagan as compelling evidence that reducing tax rates can have a bullish effect on GDP, employment, and investment...

...They want the estate tax repealed immediately, the income tax rate cutbacks accelerated, the alternative minimum tax eliminated, and the capital gains tax cut...

...At some point, a bad tax cut could be worse than none at all...

...This meant that the after tax return on a dollar earned or invested was as little as 9 cents...

...BY STEPHEN MOORE REPUBLICAN LEADERS at both ends of Pennsylvania Avenue say the greatest danger the GOP faces today is that it might fail to pass a promised tax cut this year...

...We're just not comparing apples to apples here...

...That would get the top tax rate back down to 31 percent...

...This would have the extra benefit that Bush would be telling the truth, whereas, of course, Clinton was dissembling...

...All the more reason for the president and Congress to be ambitious in the effective date of the cuts and to add capital gains and payroll tax rate cuts to the mix...

...Back in 1993 when Clinton first entered the Oval Office, he got the latest report from the Congressional Budget Office and proclaimed: Oh my gosh, the budget deficit is much worse than I thought...

...The central purpose of this reduction is not to put more money directly into people's pockets so they can rush off and spend, though that sure beats the government spending it...

...Another worthy approach is in a bill now being drafted by newcomers Mike Pence of Indiana and Jeff Flake of Arizona, who want to simply repeal the Clinton tax increase of 1993...

...If a generous tax cut passes, the economy will be more robust and families will be better off...

...The problem is that as we digest more of the details of the Bush tax proposal and as we get more bad economic news, the GOP plan appears increasingly inadequate...

...If it is blocked, Bush can make a convincing argument to voters (even in a recession) that the stronger stimulus he wanted, and the economy needed, was denied by Daschle, Gephardt, and anti-growth forces in Congress...

...Tax writers should take a closer look at a plan co-sponsored by representatives Pat Toomey, Paul Ryan, and about 20 other House members who want a Bush-plus tax agenda...

...Rather, tax rate cuts promote growth by increasing the rewards for work, saving, and risk-taking...

...The Reagan plan increased work and investment incentives from 30 to 50 cents on the dollar, an increase of 67 percent...

...What about the Bush plan...

...George W. Bush deserves high praise for proposing a bold tax cut during the presidential race and carrying that message to victory...

...And third, by getting another half trillion out of Washington, it would help prevent congressional appropriators from launching a big federal spending spree, which would be truly politically catastrophic for the GOP Tax cuts can be financed through tightening the reins on the domestic budget which rose almost 7 percent last year, but even if a bigger tax cut means a smaller surplus, so what...

...Admittedly, tax rates are a lot lower now than in the '60s and '70s, so the stimulative impact of any Bush income tax cut is going to be less pronounced than when rates were at con-fiscatory levels...

...The Republicans haven't even gotten near the negotiating table with the Democrats and already they're making preemptive concessions...

...we need a much bigger tax cut than I campaigned on...

...It stands to reason that if the tax surplus is growing, so should the tax cut...

...The price tag: $2.2 trillion, still well below the total non-trust fund surplus...

...To go from a return of 9 cents on the dollar to 30 cents is a 233 percent increase in the incentives for work and investment...

...But what was bold then may lack the spark needed now...

...Although the president reaffirmed his commitment to the $1.6 trillion tax cut in his first solo press conference Stephen Moore is president of the Club for Growth...

...First, it would do more for an economy that badly needs it...

...Let's compare the incentive effects of the Bush plan with the tax cuts of the '60s and '80s...

...If, a year from now, Republicans have passed a smallish tax cut, not all that unacceptable to the Democrats, the issue will simply be neutralized...

...Moving to a larger tax cut would work politically for Bush and the Republican Congress in three different ways...

...They are wrong...

...All of this is to say that a strong case (on economic and political grounds) can be made by the White House for a bigger tax cut with steeper tax rate reductions...

...The Bush plan cuts the top tax rate by less than 2 percentage points...

...In the early 1960s the top income tax rate was 91 percent...

...Actually, he should be fired if the tax cut comes in lower than $1.6 trillion...

...So the supply-side effects of the Bush tax plan are about one-twentieth as large as the Kennedy plan and one-sixth as large as the 1981 Reagan plan...

...Bush should now declare: Oh my gosh, the budget surplus is much bigger than I thought...

...JFK proposed chopping that top rate to 70 percent, which allowed workers or investors to keep 30 cents on the dollar...

...I say this as a supporter from the start of the Bush tax plan...

...The economy may come back to life on its own, but this particular tax cut won't provide much help...

...last Thursday, it is unpersuasive to argue in the midst of declining output and a nine-month-long stock market slide that a plan designed to cut the top tax rate from 39.6 percent to 38 percent in the first year is going to jolt our economy back to life...

...The Congressional Budget Office now predicts there will be $1.5 trillion more in tax collections over the next decade than the budget office expected when Bush first conceived his tax reduction program 14 months ago...

...That's an increase in incentives of just 11 percent and, as mentioned earlier, the first year rate cut is much smaller...

...It won't...