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Power to tax; power to destroy

By Tom Jipping
web posted January 14, 2002

Sometimes it seems the only thing changing in Washington is what is staying the same. In his early start to the 2004 presidential campaign, Senate Majority Leader Tom Daschle is using the same old liberal themes of class warfare and government control.

Senate Majority Leader Tom DaschleIn a speech last week, Senator Daschle blamed last year's modest income tax cut for both the current recession and the vanishing budget surplus. On the recession, his diagnosis and prescription are both wrong. The recession began at least last March, before the tax cut was even enacted. It's tough - even for a politician - to credibly argue that something that did not exist caused anything at all.

So, in classic Daschle-speak, the would-be presidential candidate hedged his bets a bit by also saying the tax cut may at least have made the recession worse. Gosh, he's good. His speeches are so full of words such as "may" and "perhaps" and delivered in that gooey, honey-dripping tone of his that folks aren't sure whether he's really said anything definite at all. It's as if his main instruction to his speechwriters is plausible deniability.

Still, his point was clear. One side of the coin is that the tax cut caused the recession; the other side is that canceling the tax cut is needed to ease the recession. Canceling (or repealing, modifying, scaling back, whatever) a tax cut is a tax increase. And any economist worthy of the label will tell you that raising taxes is exactly the wrong thing to do in an economic slowdown.

Even Senator Daschle's fellow Democrats know this. Some of them, after all, voted for the tax cut. Senator John Breaux of Louisiana, for example, said after his leader's speech that raising taxes in a recession is "the worst thing you could do." If anything, the tax cut helped limit the severity and duration of the recession.

Senator Daschle also blamed the tax cut for the vanishing budget surplus. On this point, he's actually right. A budget surplus means the government takes more of our money than it spends. Since the government spends way too much money already, a surplus means the government takes way, way too much of our money. Senator Daschle is just still mad that he and his fellow liberals did not get to spend the surplus rather than giving the money back to its rightful owners - the taxpayers.

The issue is not that the tax cut made the surplus disappear. It did, and it should. The issue is that the surplus is disappearing sooner than expected. Well, massive spending on unexpected things like wars and stuff tends to do that. Legislating a 10-year tax cut requires making a whole lot of economic and budget assumptions. Osama bin Laden was not one of them, and his attack on America necessarily changed those assumptions.

Stripped of its spin, Senator Daschle's speech revealed the same tax-and-spend liberal we have seen in the past. "We're here from the guv'ment," the liberals always say, "and we're here to hep ya." To them, the government does not have to justify taking our money, we have to justify keeping it. Since it's the government's money, giving it to us through a tax-cut is no different than hiking welfare payments - it's all government spending anyway. So it's no wonder Senator Daschle is frustrated that some of it slipped through his grasp and wound up in ours.

Here's the bottom line. The power to tax is the power to destroy - and Senator Daschle wants more of it. The power to spend is the power to regulate and Senator Daschle wants more of it. If that's the platform on which he wants to run, so be it - but it's the wrong prescription for the wrong diagnosis.

Tom Jipping is the director of the Free Congress Foundation's Center for Law and Democracy.

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