Get with the program, people: Embrace higher tax rates

Many factors can affect an economy, and correlation is not necessarily causation. But there’s no disputing this: During the eight years of the Clinton administration, when we had a much better economy than we’ve had since George W. Bush took office, tax rates were a bit higher but spending was much lower. Spending rose 32 percent under Clinton and 83 percent under Bush.

“The most significant problem with the Bush tax cuts was that they were not matched with spending cuts,” write Matthew Mitchell and Andrea Castillo of the Mercatus Center in their recent paper, What Went Wrong with the Bush Tax Cuts. “In fact, Washington went on a historic spending binge: From 2001 to 2009, federal spending leapt from 18.2 to 25.2 percent of GDP. This was the largest such increase in any eight-year period since World War II.”

If government spending boosts an economy, it should have soared under Bush. Instead it tanked. And it hasn’t recovered despite the continued spending.

But let’s suppose our lawmakers are right and the emphasis really should be on raising taxes. If that’s the case, they shouldn’t be so half-hearted about it. Maybe it’s long past time Americans faced the true costs of government. No more receiving government services now to be paid for by other people years from now. If lawmakers believe their largesse is good for us, they should make us pay for it in its entirety.

The budget deficit last year was $1.1 trillion. I say raise taxes $1.1 trillion now. Immediately. On everyone.

In this way, Americans would see the true costs of the government services our spendthrift lawmakers dole out. Maybe, faced with that truth, the public will start demanding fewer government services and punish lawmakers who keep doling them out.

Steve Stanek ([email protected]) is a research fellow at The Heartland Institute in Chicago.