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Right Turn
Posted at 11:15 AM ET, 07/19/2011

Spending = The tax burden

In the Wall Street Journal yesterday, economist Michael Boskin reminded us: “As Milton Friedman taught decades ago, the true burden on taxpayers today is government spending; government borrowing requires future interest payments out of future taxes.” Or as my brother-in-law likes to say, “The amount you spend is the effective tax burden.”

This explains the frustration among the Democrats: They set the course by piling up the spending, and now Republicans are refusing to do their part, that is, collect the tax necessitated by all that spending.

Jim Pethokoukis has it right when he observes:

Big Taxes to fund Big Government. Decade after decade. See, it’s an almost universal belief among left-of-center journalists, economists, policymakers and politicians that Americans must pay higher taxes in coming years to cover the medical expenses of its aging population — not to mention all sorts of brand new social spending and green “investment.” Dramatically higher taxes. On everybody. And if we have a debt crisis, maybe those tax increases come sooner rather than later.

And conversely, the connection between high taxes and big government is precisely why conservatives are so adamant about not raising taxes. Every dollar obtained by a tax hike is a dollar not cut from federal expenditures.

So it is not simply that conservatives fear an increased tax burden will hobble the economy. It is not simply that the prospect of a double-dip recession increases their determination to protect employers from additional tax burdens. The root of their concern here is that the huge uptick in discretionary spending and a new entitlement (ObamaCare) will become permanent fixtures unless they stand firm on tax hikes.

This is a perfectly legitimate battle between the two parties. The Democrats want bigger government and are willing to tax Americans, regardless of economic conditions, to keep it as big as possible. The Republicans want smaller government and are unwilling to provide the taxes to fuel an expansion of federal power. Unfortunately for the Democrats, poll after poll shows the public would rather have smaller government with fewer services and fewer taxes than bigger government with more services and more taxes. And that is precisely the issue on which the Republican presidential nominee and Republican House and Senate candidates will run on in 2012. It is the foundation of the Tea Party movement. And, at least for now, it is a winner with critical independent voters.

By  |  11:15 AM ET, 07/19/2011

Categories:  2012 campaign, Economy, Conservative movement

 
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