“We here at Squawk Box have been campaigning for politicians to ‘give back their pork' to help pay for Hurricanes Katrina and Rita. Our next guest offers up another possibility. He says we should consider following the path of President Lyndon Johnson. In 1968, LBJ enacted a one-year, 10-percent income-tax surcharge to help pay for the cost of Vietnam, a colossal example of bad timing. Joining us now live from Washington, Robert McIntyre, director of Citizens for Tax Justice. Robert, good morning. Uh, you know you're not going to get a lot of people to say, ‘Yeah, I want more taxes.'”
You have to wonder. Half to three-quarters of the American public doesn't believe in evolution (depending on how you define it). One out of three Americans thinks the budget deficit can be eliminated (a) by hoping (or praying) that it goes away (8 percent) or (b) by cutting taxes even more (25 percent). Anti-scientific, un-arithmetic thinking seems to be rampant. But has The New Republic gone over to the dark side, too?
Back in the late 1970s, when gasoline prices zoomed and oil companies were making money hand over ﬁst, our government enacted a windfall proﬁt tax to return some of those unjustiﬁed gains to the public that was paying for them. Today, as gasoline prices have again skyrocketed, the federal government's reaction is exactly the opposite: add to the excess proﬁts of energy companies with new tax concessions, paid for by ordinary American taxpayers.
New projections from the congressional Budget Ofﬁce suggest that this year's deﬁcit will be $75 billion or so less than last year's record level. Similar ﬁgures will be reported by the Bush administration just after this column goes to press. The right is already claiming victory.
“Our policies continue to boost the economy and tax revenues,” says Representative Jim Nussle, chairman of the House Budget Committee. “These numbers prove what we've said all along,” chimed in House Speaker Dennis Hastert. Indeed, claims Stephen Moore in The Wall Street Journal, “the numbers are an eye-popping vindication of the Laffer Curve.”
The president's advisory panel on Federal Tax Reform is mouthing some surprisingly attractive lines about improving our tax system. A panel appointed by Mr. Big Deﬁcits points out that “we have lost sight of the fact that the fundamental purpose of our tax system is to raise revenues to fund government.” Mr. Loophole's appointees argue that “a rational system would favor a broad tax base, providing special treatment only where it can be persuasively” justiﬁed.