Maybe I should just shut up and take the money. After all, the tax cut proposals the Republicans seem bent on enacting help me a lot more than they do the average American. I am in one of the upper brackets for federal income tax, which means a one percent reduction in tax liability will mean a lot more to me than to a lower-income family.
So why do I look askance at the GOP's largesse?
For at least a couple of reasons. The first is that we're pretty much talking about chump change. My accountant tells me (based on where the House-Senate negotiations stood on Wednesday; Lord only knows where they are now) that I stand to save about $1,000 in federal taxes. The median American family -- income of just under $45,000 in 1997 -- would, under the proposal to phase in a one percentage point reduction for every tax bracket, eventually save about $400. That's why backers of the tax-cut proposals talk in aggregate terms -- of billions in tax cuts rather than of mere dollars an individual taxpayer can hope to see.
The second, more important, reason for my skepticism comes from considering this obvious question: What is it the tax-cutters are trying to fix?
The argument used to be that tax cuts stimulate the economy. But the great fear today is that the economy may already be too hot. That's why the Fed has ticked up the interest rate by a quarter-point with the prospect of another quarter-point if things don't cool down. No, this is no economic stimulus measure, we are assured. It is a matter of simple fairness -- a move to give the American people some of their money back.
The premise for that grand gesture is a projected budget surplus of upward of a trillion dollars over the next 10 years. If the government is collecting that much more than it needs, the argument goes, then it only makes sense to return some of the excess by cutting taxes. The problem, of course, is (as Alan Greenspan and others have pointed out) that the surplus is based on wildly unreliable assumptions -- not the least of which is that the U.S. economy will continue its unprecedented robustness. That's not only counting the fiscal chickens before they hatch; it's giving away the eggs.
It also assumes that there are not good uses to which the presumed surplus could be put -- for example paying down the national debt, not to mention subsidizing prescription costs for Medicare patients or measures to narrow the unprecedentedly wide rich/poor income gap by funding education and training programs so that America's poor can find decently paid work in this flourishing economy.
And that is precisely the kind of talk that will reassure the tax-cutters they're doing the right thing. If there's a loose dollar in the federal Treasury, they say, Democrats will find a way to spend it. Tax and spend, you know.
And truth to tell, there is a tendency on the Democratic side to cast government in an activist role, to dream up new things for government to do. Except for such matters as corporate welfare and capital-gains relief, Republicans are more likely to see government as too costly because it is too intrusive.
But their remedy for what they see as fiscal profligacy is not to argue for fiscal sanity but to make spending impossible. As happened under President Reagan -- remember David Stockman? -- they would like to change the legislative debate from what new services and programs a well-heeled government ought to be providing to which existing services and programs a cash-starved government ought to be cutting.
That, I really do believe, is the main long-term reason why Republicans are so committed to cutting taxes.
The short-term reason may be less complicated -- the chance, during the August recess, to tell the folk back home: Look what I did for you!