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| Article Title: "Clinton's
Leftovers " |
Author:
Section: Issues &
Insights |
Date: 1/7/2004 |
|
Campaign: The Democratic candidates for president
have started to unveil the economic plans they hope will win the White
House. So far, we're not impressed.
The problem is, so many of the
ideas that have been brought out seem stale, like yesterday's nostrums.
Take the economic plan that emerged from Gen. Wesley Clark's camp
Monday. It focuses on raising taxes on the rich - now almost an
unquestioned matter of faith among Democrats.
Clark, like so many
other politicians, has discovered the wonderful electoral arithmetic of
taxes: If you tax just a few rich people, the rest of the nontaxpaying
world will be forever grateful to you. That means votes.
That's
why Clark's "simple" tax reform cuts taxes on families under $100,000 in
income, while jacking rates up to 45% for those above. Why not make the
rich pay?
The problem is, they already do. The top 1% of all
taxpayers paid 34% of all taxes in 2001. That's up from 18% in 1981. And
the top 5%, those with roughly $125,000 that Clark wants to go after, now
pay over half of all taxes.
That's a thin tax base. And these
people, being well-educated high earners and all, aren't stupid. If you
tax them hard and heavy, they'll find a way to protect their money from
the tax man. That's what President Clinton discovered in 1993 when he
imposed the "millionaire's surtax." Taxable income from the rich actually
fell.
It was entirely predictable. People will protect their
capital, one way or another. They do so by stopping all but necessary
investment, thus killing jobs. Or they shift investments to other locales
- remember the Asia boom of the early 1990s, fed by U.S. investors?
It took a GOP Congress in 1994 and a capital gains tax cut in 1996
to fully undo the damage Clinton did early in his term. Then the whole
thing got going - the stock market, economy, jobs, everything.
Now
it seems some Democrats have forgotten what should have been a bitter
lesson for their party. And after President Bush's own success in
reversing a sliding economy by cutting taxes, you'd expect something a
little more astute from the leading candidates. But you'd be
wrong. |
~*~*Bethany*~*~
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