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The Looming Problem, Part II

I blogged the other day about Dick Gordon's interview on The Connection with Barry Anderson, departing Deputy Director of the Congressional Budget Office. Here's what Barry had to say about tax cuts (this was over a week before Congress passed the tax cut package):

Barry Anderson: I view the tax cut debate much more on something along the lines of the size of government. The Republicans and the right definitely want to keep taxes lower, because they're afraid that if they don't do tax cuts, then taxes will raise to over twenty percent as a percentage of GDP [Gross Domestic Product]. It was just that level in 2000, the highest level we've had since World War II. So they want to do the tax cuts to keep the money out of Washington and leave it in the hands of the public. The Democrats are saying there are legitimate and important needs and that we need to have the taxes go back up and not be cut in order to pay for those needs without running deficits. But Dick, neither side is really being, I think, totally up-front with the public.

First of all, the Republicans. They want to limit the size of government. But if you look at their proposals, they are not at all specific of how they're going to cut spending, where those cuts are going to be. Quite the contrary: many of the Republicans are arguing for more spending, particularly for defense and homeland security. But that doesn't jibe or tie with the tax cuts.

But the Democrats aren't any better. They're saying they want no more tax cuts, and in fact the ones that were passed in 2001 to expire. But what they are not doing is saying what the impact of that is going to be on the middle class. Oh, they'll say a lot that the rich will pay more, and it's true, they will. But the middle class will also pay more. The Democrats are not coming out and saying, look, if you want these new benefits, if you want this expansion, if you want these new programs, then you, Mr. Middle Class Taxpayer, come some year in the future, are going to have to pay $2,000 more per year. In fact, Dick, if they just repealed the 2001 tax cut, which I believe Congressman Gephardt has called for, taxes would go up not just for the upper class, not just for the middle class, but for everyone across the income spectrum, even those in the lowest classes. So neither side is really being up-front with the public.

It's interesting to see someone who has been a federal budget insider for many years throw up his hands in disgust at both major parties. It reminds me of my blog entry on my political beliefs a few months ago.

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