Jewish World Review Oct. 5, 2004 / 20 Tishrei, 5765

Leo Morris

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If we can't cut spending, then we must make the revenue pie bigger; here's how


http://www.jewishworldreview.com | Let us revisit a few Democratic presidential-nomination acceptance speeches for a lesson in how to promote American unity.

George McGovern, 1972: Discussion of tax laws is held in closed rooms "where the administration, its powerful friends and their paid lobbyists can turn every effort at reform into a new loophole for the rich and powerful."

Jimmy Carter, 1976: "The powerful always manage to discover and occupy niches of special influence and privilege."

Walter Mondale, 1984: "What we have today is government of the rich, by the rich and for the rich."

Michael Dukakis, 1988: "If anyone tells you that the American dream belongs to the privileged few and not to all of us, you tell them the Reagan era is over."

Al Gore, 2000: "I will not go along with a huge tax cut for the wealthy at the expense of everyone else."

Kind of a theme there.

In 1933, Franklin Roosevelt declared war against "poverty and pessimism." He asked for and got power "as great as the power that would be given me if we were in fact invaded by a foreign foe." Over 100 days, he pushed through legislation that resulted in unprecedented government growth and forever changed the relationship of Washington to the American people.

And, save for a notable exception or two, the national Democratic Party hasn't had an original idea ever since. There is a big pot of wealth somewhere, appearing somehow. The privileged few figure out a way to get there first and take too much of it, leaving only crumbs for the rest of us. It is the federal government's job to spread that wealth around.

This is the philosophical foundation for the "two Americas" theme so long perpetuated by Democrats, so cleverly articulated by John Edwards, so ardently embraced by John Kerry. They pitch it as an antidote to the "politics of greed," one America peopled by hardworking dupes forever taken advantage of by the other America, occupied by the lazy ruling class with an evil amount of money. But they're really selling the politics of envy, one America filled with people who have an unquestionable right to whatever the federal government promises and, the other inhabited by Americans who have the never-ending duty to keep paying for it.

And they do keep paying for it. Those evil, privileged rich people create the wealth that keeps the economy going and, oh, by the way, fills up the federal pot of money. The top 50 percent of income-earners pay 96.5 percent of taxes. The top 20 percent pay 80 percent.

Well, that last number isn't quite true. According to a study by the nonpartisan Congressional Budget Office, that top 20 percent of earners would have paid 78.4 percent of income taxes without the cuts pushed through by George Bush; because of those cuts, their burden rose to 82.1 percent. The cuts also removed 14 million poor taxpayers from the tax rolls entirely. Those hated "tax cuts for the rich" actually reduced the tax burden for everybody, but redistributed it upward, in a "progressive" way you'd think the liberals would love.

And, not incidentally, brought even more money into government coffers. Income tax receipts went up this year for the first time since 2000. From July 2003 to July of this year, tax receipts from business increased an astonishing 38 percent; personal-income collections rose 9 percent. The deficit for the fiscal year, originally projected at about $500 billion, actually came in at $422 billion.

When you reduce the barriers to wealth creation, more wealth is created. John F. Kennedy, one of those rare exceptions among national Democrats, reduced the top marginal tax rate from 91 percent to 70 percent, resulting in 42 percent economic growth from 1961 to 1968. Ronald Reagan reduced the top rate from 70 percent to 28 percent; government revenue nearly doubled.

John Kerry remains clueless. We shouldn't tell middle-class families "to wait for a tax cut so that the wealthiest among us can get even more," he said in his acceptance speech.

Congress has overwhelmingly voted to extend many of George Bush's tax cuts through 2009. That means more economic growth and more jobs, greater tax revenue and a lower deficit. Kerry would repeal the tax cuts "for the rich" - goodbye to capital gains and dividend rate cuts; hello to a return of the top marginal rate from 35 percent to almost 40 percent. By increasing the taxes on investment and business expansion and wealth creation, we can somehow have more of these things.

Government has gotten too big, and Americans expect too much from it, for us to expect that anyone, of any political stripe, will ever again show true spending restraint. Bush and Kerry have each proposed programs that will cost at least $1 trillion, and some analysts put the cost of Kerry's plans at more than $2 trillion.

But we still have a clear choice. We can seek taxing programs that give government beneficiaries a "fairer share" of an ever-smaller pie. Or we can create incentives for the people willing and able to make the pie bigger.



Leo Morris, a native of Eastern Kentucky and the son of a coal miner, is editor of the Fort Wayne (Ind.) News-Sentinel editorial page. Comment by clicking

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© 2004, The News-Sentinel (Fort Wayne, Ind.). Distributed by Knight Ridder/Tribune Information Services.