The Republicans’ Expensive Tax Promise (NYT: On the Economy)

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http://www.nytimes.com/2007/12/14/us/politics/15web-redburn.html?_r=1&ref=business&oref=slogin

By TOM REDBURN
Published: December 14, 2007

For decades, ever since Ronald Reagan was elected in 1980, promising to cut taxes has been an essential element of every successful Republican campaign for the presidency. Republican politicians still vividly remember that George H.W. Bush lost to Bill Clinton after agreeing to a modest tax increase as part of a broad budget deal — and most have vowed never to make that mistake again.

But there is a crucial twist to the campaign this time around. All of the Republican candidates have pledged to extend President Bush’s tax cuts from the early 1990s beyond their scheduled expiration in 2010. That promise, however, does not carry the same weight as in the past.

That’s because, rather than delivering any additional benefit that voters can actually take to the bank, carrying out such a pledge would do nothing more than maintain the status quo. Nobody’s taxes would be cut further; they would at best stay the same. There’s not as much political payoff in that.

And preventing anybody from being worse off is going to be incredibly costly. Indeed, it requires running faster and faster just to stay in the same place. A new report from the Congressional Budget Office on the long-term budget outlook, delivered to Congress on Thursday, makes clear the depth of the fiscal hole the next president will inherit from President Bush.

Simply to extend the Bush tax cuts indefinitely into the future and, as both Republicans and Democrats have vowed, prevent the alternative minimum tax from imposing an increasingly heavy burden on tens of millions of middle-class and upper middle-class taxpayers would cost the government, over the next decade, roughly $2.5 trillion in revenues now expected under current law. And that’s just the beginning.

Even without taking on any additional tasks, merely meeting the government’s existing obligations — mostly to pay for the military and to keep up with the health care and retirement needs of the elderly — would send the budget deficit soaring, pushing overall federal debt held by the public from under 50 percent of the size of the nation’s economy today to over 300 percent by 2050.

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