Written by Marian Tupy, a policy analyst, Center for the Global Liberty and Prosperity at the Cato Institute. Posted with permission from Cato @ Liberty.
It has been said of the neo-cons that they are often wrong but never in doubt. Well, Bill Kristol was at it again, predicting the future with his usual sense of supreme confidence. According to the neo-conservative editor of the Weekly Standard, “It won’t kill the country if Republicans raise taxes a little bit on millionaires… .The Republican Party is gonna fall on its sword to defend a bunch of millionaires, half of whom voted Democratic, and half of whom live in Hollywood and are hostile to Republicans.”
The left has jumped on Kristol’s words. As Andrew Rosenthal wrote in the New York Times, “When even Bill Kristol, the severely conservative Weekly Standard editor, says Republicans should agree to raise taxes on the richest Americans, you have to wonder if the G.O.P. has thought through its post-election, hold-the-line strategy.”
To start with, Kristol misunderstands the opponents of the tax increases on the rich, whose main goal is not to ensure that the rich get to keep more of their money. Their main goal is to prevent the federal government from obtaining a new source of revenue. Why might that be?
Tax increases can be immediate, but spending cuts must be spread over many years. That provides politicians with plenty of opportunities for change their minds on spending (i.e.: vote for me and I will increase funding for your program). Contemporary Western Europe provides a perfect example of this phenomenon. In the wake of the 2008 crisis, Western European countries have introduced substantial tax increases that, in my humble opinion, are the primary reason for Europe’s double-dip recession.
Their spending has either continued to grow in both nominal and real terms (Britain, France, Portugal, and Spain) or flat lined (Italy). Only in the already bankrupt Greece did both types of spending decline. In all likelihood, a bipartisan deal on taxes in Washington would result in higher taxes, more spending and, in time, higher deficits.
Throughout the early 2000s, Bill Kristol and the Weekly Standard have largely ignored President G.W. Bush’s orgy of new spending that discredited the GOP in the eyes of many fiscal conservatives. He does not speak for conservatives in general and small government advocates in particular.