Seeker of Truth
05-31-2003, 07:53 PM
Economic Conservatives Think Small, Declaring Victory And Going Home
By W. James Antle III
web posted May 26, 2003
Economic conservatives appear to approach policy debates according to the strategy some advised the United States to adopt during the Vietnam war: Declare victory and go home.
At least that is what is apparent in their reaction to the shrunken version of President Bush's economic stimulus plan passed by Congress. To be sure, aside from the federal handout to state governments, it isn't a bad bill. It cuts the top marginal income tax rate from 38.6 percent to 35 percent. Dividends and capital gains taxes are cut to 15 percent retroactive to January 1 and May 6, respectively. Depreciation write-offs are boosted from 30 percent to 50 percent while small-business expensing is quadrupled through 2005. Child tax credits won't do much for economic growth because they have no real incentive effect, but it's always nice when families retain more of their income. This tax cut, unlike the on passed in 2001, is front-loaded to take place now.
Dick Cheney is shown in this image from video after casting the decisive vote in the U.S. Senate, 51-50, for approval of $330 billion in new tax cuts on May 23
Given the Republicans' slim majority in the Senate – and the squishy ideological composition of the Senate GOP conference – along with the Herculean efforts required to jam the most tax relief possible into the allotted budget window while staying within ridiculous dollar limits set according to static revenue estimates, it's easy to imagine a far worse result. Indeed, several compromise stimulus plans that nearly passed were far worse. Politics is the art of the possible and a very strong case could be made that this was the best tax cut possible under the present political circumstances.
Still, did it merit the almost unqualified euphoria it elicited from economic conservatives outside of government? This tax cut has gotten emphatic cheers not only from fiscally conservative congressmen from the economic-growth wing of the Republican Party, whose reaction is understandable, but by policy wonks and intellectuals whose aspirations should be guided more by ideas than political possibility. Syndicated columnist Bruce Bartlett described it as "one of the best tax bills in history," perhaps second only to Ronald Reagan's historic tax cuts. Stephen Moore of the Club for Growth was equally bullish, echoing the sentiment that this "is the most pro-growth tax legislation since President Reagan's 1981 tax cut" in a column for National Review On-Line. Steve Forbes, who called for a 17 percent flat tax during his campaigns, was similarly effusive in his television appearances.
More @ enterstageright.com (http://www.enterstageright.com/archive/articles/0503/0503econcons.htm)
By W. James Antle III
web posted May 26, 2003
Economic conservatives appear to approach policy debates according to the strategy some advised the United States to adopt during the Vietnam war: Declare victory and go home.
At least that is what is apparent in their reaction to the shrunken version of President Bush's economic stimulus plan passed by Congress. To be sure, aside from the federal handout to state governments, it isn't a bad bill. It cuts the top marginal income tax rate from 38.6 percent to 35 percent. Dividends and capital gains taxes are cut to 15 percent retroactive to January 1 and May 6, respectively. Depreciation write-offs are boosted from 30 percent to 50 percent while small-business expensing is quadrupled through 2005. Child tax credits won't do much for economic growth because they have no real incentive effect, but it's always nice when families retain more of their income. This tax cut, unlike the on passed in 2001, is front-loaded to take place now.
Dick Cheney is shown in this image from video after casting the decisive vote in the U.S. Senate, 51-50, for approval of $330 billion in new tax cuts on May 23
Given the Republicans' slim majority in the Senate – and the squishy ideological composition of the Senate GOP conference – along with the Herculean efforts required to jam the most tax relief possible into the allotted budget window while staying within ridiculous dollar limits set according to static revenue estimates, it's easy to imagine a far worse result. Indeed, several compromise stimulus plans that nearly passed were far worse. Politics is the art of the possible and a very strong case could be made that this was the best tax cut possible under the present political circumstances.
Still, did it merit the almost unqualified euphoria it elicited from economic conservatives outside of government? This tax cut has gotten emphatic cheers not only from fiscally conservative congressmen from the economic-growth wing of the Republican Party, whose reaction is understandable, but by policy wonks and intellectuals whose aspirations should be guided more by ideas than political possibility. Syndicated columnist Bruce Bartlett described it as "one of the best tax bills in history," perhaps second only to Ronald Reagan's historic tax cuts. Stephen Moore of the Club for Growth was equally bullish, echoing the sentiment that this "is the most pro-growth tax legislation since President Reagan's 1981 tax cut" in a column for National Review On-Line. Steve Forbes, who called for a 17 percent flat tax during his campaigns, was similarly effusive in his television appearances.
More @ enterstageright.com (http://www.enterstageright.com/archive/articles/0503/0503econcons.htm)