Commentary

A Tax Cut Testament

This article was published by the Copley News Service.
The tax cut passed by Congress “will not become law,” promises President Bill Clinton, who was elected on a promise to provide a middle-class tax cut. Despite trillions in projected surpluses, he would prefer not give one penny back to the people who earned it.

The case for tax cuts could not be more clear. Almost from the moment that Ronald Reagan delivered a sweeping rate reduction in 1981, Democrats and Republicans alike have been working overtime to increase government’s take.

Senate Majority Leader Robert Dole made his career pushing tax hikes, President George Bush agreed to a high tax, big spending compromise with the Democratic Congress, and Clinton mixed a gas tax hike with income tax rate increases in his first budget package.

As a result, Americans now face the highest peacetime tax collections ever, 20.6 percent of GDP. The burden was heavier only once in 1944, when America was fighting in the greatest war in human history.

The constant plucking of the American goose has led to expected surpluses as far as the eye can see. It would seem only fair for the government to begin returning some of their money.

Not in the eyes of Bill Clinton, however. He favors not those who earn money, but those who live off those who earn money.

It should come as no surprise, however, that a politician claiming to represent the people is instead representing vested interests. After all, politics tends to attract people who desire to exercise coercive power for all the wrong reasons. Nobel Laureate F.A. Hayek appropriately titled one chapter of his The Road to Serfdom: “Why the Worst Get on Top.”

Of course, the insight was not unique to him. The Jewish prophet, Jeremiah, warned that people are “skilled in doing evil.” These are precisely the people most likely to gain control of government.

And, they will use their coercive power to tax to do evil. The author of Ecclesiastes declares: “If you see the poor oppressed in a district, and justice and rights denied, do not be surprised at such things. … The increase from the land is taken by all; the king himself profits from the fields” (5:8,9).

Indeed, when the Israelites clamored for a king, the prophet Samuel warned:

This is what the king who will reign over you will do:

…He will take the best of your fields and vineyards and olive groves and give them to his attendants. He will take a tenth of your grain and of your vintage and give it to his officials and attendants. Your menservants and maidservants and the best of your cattle and donkeys he will take for his own use. He will take a tenth of your flocks, and you yourselves will become his slaves (8:11-17).

Thousands of years later, nothing has changed except that we now lose far more than 10 percent. Democracy has become a fig leaf behind which interest groups loot the larger public.

The president and his allies are masterful practitioners of the politics of envy. Shortly after taking office, he justified his tax hikes: “I will ask the economic elite who made more money and paid less in taxes to pay their fair share.” He continues to play the same game, recently calling the GOP proposal “so weighted toward special interest and upper-income people.”

Yet, envy is far more destructive to the larger social order than greed, which the Clintons have routinely criticized. The greedy hurt themselves. The covetous harm other people which is probably why the Tenth Commandment addresses only the latter: “You shall not covet your neighbor’s house. You shall not covet … anything that belongs to your neighbor” (Exodus 20:17).

The truly covetous are happy only if they are able to take from their neighbor. The easiest way to do so, other than to use a gun to heist someone’s wallet, is to use political power to tax. Community relations become a negative sum game.

Of course, Clinton’s opposition to tax cuts seems to be waning in the face of the latest poll from Wirthlin Worldwide, which found that 59 percent of Americans thought he should sign the tax cut bill. White House National Economic Council Director Gene Sperling has begun talking about the possibility of compromise. Alas, he wants only a miserly $250 billion in tax relief, none of which would go to those who pay the most in taxes.

The GOP tax cut is by no means perfect. It is, for example, far too small. But at least it is a beginning. With revenues and surpluses exploding, the president has no excuse not to approve a large tax reduction for allAmericans.

Doug Bandow is a senior fellow at the Cato Institute.