Taxes and Spending

It was a news story to end all news stories—literally. The announcement that a giant asteroid was headed for the vicinity of the earth caused a momentary sensation.

Far from having been reformed, much less abolished, welfare continues to grow. The most recent example is the attempt by the Clinton administration to convince Americans that there is a "child care crisis," which can only be "solved" through expansion of government. The welfare state has become a deeply destructive but sadly unavoidable fact of life in modern society.

When Clinton declared he would use budget surpluses to "fix" Social Security, the ruse was obvious. He was trying to forestall the only moral use of any surplus: cutting taxes. But a few days later, a very strange trend began to develop. Clintons words were endorsed and echoed by D.C. conservatives and libertarians.

Seen and heard almost everywhere in New York are these four words: "Hey, you never know." It's the slogan of the New York State Lottery Commission, and it is used to trick people into a self-imposed form of higher taxation.

For fifteen tedious years, Republicans demanded that Congress give the president the "line-item veto." Reaganites concocted this policy gimmick as a diversionary tactic. It allowed them to blame Congress when the budget wouldn't balance and spending soared. If only the president could eliminate pork, line by line, spending wouldn't be perpetually out of control.

As recently as 50 years ago, economists regarded the vitality of the economy as consonant with its ability to produce things people want (and would pay for). Today, the economy has been redefined into something called the Gross Domestic Product, or GDP. It measures all goods and services brought to market in a given year. But is it really an accurate measure of how well an economy is serving people's needs? Here are some outlandish ways the GDP can be boosted.

Among the tax discussions on Capitol Hill this year are the proposed changes in the 80-year-old inheritance tax. Part of the Republican tax plan calls for an increase in the estate tax exemption from $600,000 to $1,000,000, with considerably larger exemptions for farmers and other small business owners. The less generous Clinton Administration proposal would provide low interest rates on estate taxes paid in installments.

At last, the Republican Congress has proposed cutting death taxes. It wants the exemption to be raised from $600,000 to $1 million. Not bad for a start. But if Congress is serious about reducing the tax, the rate should immediately index the exemption to the inflation rate. If the inflation of the last 10 years continues over the next, the $1 million exemption will be worth a third less. Why should the government get rich by mismanaging the monetary system?

The Dole Foundation is a project of the United Cerebral Palsy Association (operating budget: $540 million). Fully 80 percent of the UCPA's funding comes straight from the taxpayer's wallet. Voluntary contributions are only 11 percent, less than the percentage the UCPA spends on pro-welfare political lobbying. The Doles do not fund the Dole Foundation. Taxpayers do. No wonder he doesn't talk about it much.

They should have called it the Federal Advisory Panel for a Huge and Sneaky Tax Increase and a Massive Increase in Corporate Welfare. That—and not "privatization"—is the real upshot of what the advisory counsel to fix Social Security recommended.