A tax increase is inevitable

4/5/07

Blessed Triduum and Easter!

This is a letter I sent to the Wall Street Journal on 4/5/07:


The Wall Street Journal almost had it right in its 4/5/07 editorial entitled “The Coming Tax Increase.” Tax increases are indeed coming, but they were made inevitable long before the Democrats re-implemented “pay-as-you-go.” Tax increases were made inevitable by the fiscal profligacy of the Congress, which, until this year, had been in Republican hands since 1994, and the unwillingness of our current GOP president to veto a spending bill. Because of this shameless display of fiscal debauchery, taxes will have to be increased if we ever hope to achieve fiscal balance.

One can argue, as the Wall Street Journal incessantly does, that we can grow our way out of these deficits. While deficits are currently heading down as a result of natural revenue increases, we are far from a balanced budget, which should have been achieved some time ago, given the relatively robust performance of the economy over the last few years. Growing our way out of deficits would necessitate spending restraint. Where in recent history does the Wall Street Journal find grounds for optimism on this front? Any realistic look at the spending tendencies of either party tells us that taxes must be raised, as they were in the ‘90s, if we are ever to balance the budget. Despite new age approaches to public finance, both the populace in general and the financial markets seem to agree that balancing the budget, at least over the cycle, is a goal worth achieving.

No one likes tax increases, especially we fiscal conservatives who have grown so disenchanted with the performance of the party that pretends to be our champion. However, until our politicians learn to be prudent with the public purse, tax increases are in our future no matter who wins in 2008.



The Pontificator