Let the American People Be Heard - The President's tax plan is the start of a new debate about the size of our government

by Paul Beckner
President, Citizens for a Sound Economy

1/15/03

Often in Washington the political parties engage in fierce battles about small ideas. For example, the Senate right now is fighting over “committee ratios” and last week Congress argued about whether unemployment should be extended for an additional 12 weeks or 18 weeks.

But thanks to President Bush, America is going to have a debate about a real and a big idea. The debate will define the differences between the liberal, big government philosophy and the philosophy of limited government. I am of course talking about the president’s economic plan to cut taxes for individuals. His plan includes:

Accelerating the income tax rate cuts to give more money right now to taxpayers
Accelerating the elimination of the marriage penalty to provide help right now to married couples
Immediately increasing the per-child tax credit from $600 to $1,000
Eliminating the double taxation of dividends paid to a company’s shareholders

He has presented a pretty sweeping plan. First, all income taxpayers get a tax cut right now. The plan includes changing withholding tables so taxpayers will see the reduced tax burden immediately upon passage. The plan ends the annual rhetorical debate about the marriage penalty – the plan ends it and takes it off the table for future political debate. And, perhaps most importantly, it provides that individuals who decide to take a risk and buy some stock (over 50 percent of the American people) will no longer continue to serve as the federal government’s ATM machine. If you own stock, the profits or dividends from that stock will no longer be taxed twice. The company will pay taxes on its profits, as it does today, but individual stockholders will no longer be taxed on the distributed dividends.

The liberal establishment does not like this plan. The liberals have accused the president of hubris for, of all things, acting on his electoral mandate that he won in the fall elections. The liberal leaders in Congress do not like the idea of giving all taxpayers a tax cut because if everyone gets a tax cut, that means some rich people will get one as well. The liberals claim this plan favors the wealthy. They also claim it will increase budget deficits. And, in the wake of their electoral defeat the Left vows to aggressively oppose this plan.

The left is wrong. First, I think America should have a real debate about the size and scope of government. This plan is real and it is big and it will impact the size and scope of government. More importantly, the more this plan is talked about and debated outside of Washington the better off it is for those of us who favor limited government. The idea here is to move money away from the government and back into the hands of the individuals who earned it in the first place. Those individuals should have a say in this debate.
In fact, what the liberals mean when they say they want an aggressive debate is this: They want to debate this on the Op-ed page of the New York Times and in staged congressional hearings. They want to make a lot of noise inside of Washington and scare enough politicians to vote against the president’s plan. The last thing they actually want to do is make a lot of noise about this plan outside of Washington. Because the more taxpayers hear about the President’s plan, the more taxpayers are going to like it.

Those of us who believe in limited government have a great deal of work to do. It is our job to demonstrate the support of the American people to the politicians. We need to engage activists and educate citizens about the elements of this plan. The more we discuss this with friends and neighbors, the more likely this plan will be enacted into law.

The liberals already know that…..

Paul Beckner is president and CEO of Citizens for a Sound Economy.