Bob Dole has set forth a masterful economic plan for America that leads to a balanced national budget by 2002. He will cut government spending and put the spurs to a limp-along economy by reducing oppressive taxation and eliminating intrusive regulations on business activity.
Dole believes the people need a raise. He proposes a 15 percent reduction in individual income-tax rates, a reduction in the capital-gains tax from 28 percent to 14 percent, a $500 tax credit for each child under 18 years of age and a repeal of Clinton’s 1993 increase in taxes on the Social Security benefits of millions of retirees.
This is prelude to a massive overhaul of the 10,000-page tax code and a long-overdue neutering of the IRS.
In anticipation of naysayers, Dole said, “We have long had a debate in our party about which should come first. Growth advocates say tax cuts first. Fiscal conservatives say a balanced budget first. I say they’re both right. . . . Deficit reduction is in my blood, and a balanced budget will by my legacy to America.”
These naysayers are out in force, hawking the myth that the national deficit exploded during the 1980s because of the Reagan tax cuts. They have repeated this absurdity so many times that they actually believe it.
They conveniently don’t mention that tax revenues soared following these cuts and almost doubled by the time Reagan left office. But this explosion of revenues simply couldn’t match the explosion of spending by the obsessive-compulsive wastrels in the Democratic Congress.
This muddled mind-set can be compared to that of the vice president of finance in a big company who argues that a proposed cut in the price of the product will bust the corporate budget. His calculator says that if you reduce prices, you reduce revenues. His static analysis does not deal with the prospect of higher profits based on an increase in the volume of sales.
Dole’s uphill battle will be with a rising number of groups who do not believe it is in their self-interest to cut taxes. This includes government employees and their union bosses, whose jobs, pensions and pay increases depend on taxes, socialists who understand that taxes fuel bigger and more controlling government, organizations such as the National Association for the Advancement of Colored People, the American Association of Retired People and Planned Parenthood, who are parasitically attached to the public treasury, guilt-ridden social advocates who are trying to win spiritual points by giving away someone else’s money, politicians who need a big bankroll with which to buy votes and reward friends, and, finally, the overlords of the welfare state and the recipients of hand-outs who have come to love them.
Clinton is worried. Aides and advisers to the president have urged him to propose more tax cuts to offset the Dole proposals. But he cannot. He has already alienated his liberal base by agreeing to sign the welfare-reform bill. And he is enmeshed in the tangled web of his own class-warfare rhetoric and the standard Democratic mantra that general tax cuts only help the “greedy rich.”
He has no choice but to try convincing the people that allowing them to keep more of their own money is a very bad idea that will wreck the economy, increase the deficit, lead to higher interest rates and hurt their families.
It will be a difficult sale. Americans are becoming aware that the underlying premises of every tax is that the money will do more good in the hands of government than in the hands of the people who earned it. They are becoming aware that a transfer of their money to the government is tantamount to a transfer of their freedom to make their own decisions, raise their own children and manage their own lives and businesses.
The best chance we have to shrink a bloated and over-arching government is to squeeze it down between a balanced-budget amendment to the Constitution, one with real teeth, and a significant, across-the-board cut in taxes.
That’s the Dole strategy, and he has picked the right man, Jack Kemp, to help him deliver on his promises.
