Say Anything Blog

This is rather galling, no?

Amid the hubbub about U.S. attorneys last week, few people noticed the big Beltway economic news: Senator Kent Conrad and his fellow Democrats proposed their five-year budget outline, or at least that part of it they’re willing to discuss in public.

Mr. Conrad, the Senate Budget Chairman, pulled off the neat magic trick of claiming his budget includes “no tax increase,” even as it anticipates repeal of the Bush tax cuts after 2010. How does he pull that rabbit out of his hat? By positing what amounts to a giant asterisk where the tax increase is supposed to go and hoping no one will notice.

Mr. Conrad has no intention of extending the Bush tax cuts, which he voted against and whose repeal would slap the economy in 2011 with the largest tax increase in U.S. history. But Senate Democrats don’t want anyone to know this, at least not before the 2008 election. So Mr. Conrad says his budget revenue estimates “assume that Congress will take steps to counter the effects of the expiration of tax cuts in 2010 in a manner that does not add to the nation’s debt burden.” How so? Well, “this additional revenue can be achieved without raising taxes by closing the tax gap, shutting down illegal tax shelters, addressing tax havens, and simplifying the tax code,” he avers.

What the Senator should have said is “Abracadabra.” The 10-year revenue increase from repealing the Bush tax cuts is something like $2 trillion, according to Congress’s static-revenue models. Mr. Conrad is claiming that Congress will make up for all of that lost revenue by chasing down such illusions as the “tax gap,” which the IRS claims is the difference between the taxes people owe and what they pay.

But if this magical $345 billion a year (as of 2001) were easily found, don’t you think the army of IRS auditors and tax collectors would have found it by now? The only way to close this “tax gap” is by harassing taxpayers or closing loopholes in ways that are sure to meet political resistance and perhaps result in a backlash. Congress will never do it.

To boil it down, what Conrad is claiming he wants to do is let the Bush tax cuts expire but then “counter” that by, well, getting the IRS to collect even more in taxes by closing the “tax gap” (e.g. holding tax payers by their feet and shaking them until every last nickel is out of their pockets).

And yes, Conrad is apparently serious in saying that he’s going to “counter” a tax hike by collecting even more in taxes.

One wonders why Conrad, who again claims to want to protect Americans from the economic hit that will result from letting the Bush tax cuts expire, wants to let those tax cuts expire at all?  I mean, if he doesn’t want to increase our tax burden why raise our taxes back to where they were?  The Senator claims that we can’t keep the Bush tax cuts because they’re causing budget deficits, but notice that the Senator never talks about the spending he and his colleagues propose causing those deficits.  And that’s because Kent Conrad is a tax-and-spend liberal.  He doesn’t really consider the expiration of the Bush tax cuts a tax hike because he sees that money as being the governments money temporarily on loan to we the citizens.

Before Conrad and his Democrat cohorts raise our taxes they should be able to tell us that government waste and profligate spending has been all but eliminated.  But they won’t tell us that, because they aren’t even going to try and do that.  They’ll just raise our taxes back up to where they were before the Bush tax cuts, tell us it’s for our own good, and then keep on spending like the big-government liberals they are.