Bart wrote:
If we spend away on war our national borrowing
power we'll have to stop spending money on the
DEA, EEOC, FDA, and the whole
regulatory, criminalizing apparatus.
Not according to Alexander Tabarrok or Robert Higgs:
WHEN A "TAX CUT" ISN'T ONE
It sounds like a bad joke told by an economically literate stand-up
comic: When is a "tax cut" not really a tax cut? When it isn't offset
by a reduction in government spending. In that case, it is more
accurate to call the "tax cut" a deferred tax increase. (That's why
the joke's not funny!)
According to Alexander Tabarrok, research director of the Independent
Institute, this is precisely the case with President Bush's proposed
"tax cut"; it's really a tax shift, Tabarrok argues, to a future
where taxes already were expected to increase significantly to pay
for growing Social Security and Medicare liabilities.
"To grasp the difference between a tax cut and a tax shift, we must
first understand that what ultimately drives taxes is spending,"
writes Tabarrok in an op-ed carried last week by United Press
International.
"If spending increases, as it has under the current administration,
then sooner or later taxes must increase (or inflation, a type of
tax, will go up).... If spending isn't cut, then less taxes today
means more taxes tomorrow. Thus, the Bush tax cut plan is really a
plan for future tax increases....
"Conservatives used to argue that the public didn't want big
government but was fooled by deficit financing and other hidden taxes
into thinking that it costs less than it actually does. Today,
conservatives seem to believe that the public does want big
government and that the only way to curb government growth it is to
fool the public with lower taxes today so that the costs of
government will be so high tomorrow that no one will accept the
offer. How cynical.
"Will deficits in fact force future administrations to cut spending?
It's possible but I am fearful. The combination of changing
demographics and current tax cuts is seeding out economy for a fiscal
'perfect storm.' When the storm hits there will be a crisis, and as
economist and historian Robert Higgs has ably demonstrated in CRISIS
AND LEVITHAN, small government rarely does well in a crisis."
See "What Tax Cut?" by Alexander Tabarrok (5/22/03)
http://www.independent.org/tii/news/030521Tabarrok.html
Also see:
"Taxation, Forced Labor, and Theft," by Edward Feser (THE INDEPENDENT
REVIEW, Fall 200)
http://www.independent.org/tii/content/pubs/review/tir52_feser.html
Independent Institute archives on taxation, see
http://www.independent.org/archive/taxation.html
<<<
Best, Michael