The Great Tax Battle of 1990 – Winner #2: The Democrats

[This Commentary originally appeared in the July 26, 1990 issue of The Mendon-Honeoye Falls-Lima Sentinel.]

Part two in a series discussing the ramifications of the announcement in June by President Bush to increase tax revenues.

In the spirit of last week, let’s begin with some expository gibberish which permits the reader to know exactly where I stand:

I grew up in the heart of a Democrat stronghold in the shadows of an old fashioned blue collar steel mill. All that was fair, all that was honest was taught to me by my grandparents and their friends in the name of FDR. All that was innovative, all that was accomplished by youthful zest was brought to me by my parents and their friends in the name of JFK.

Of course, my elders rendered these common sense philosophies without the burden of economic or political theory. (I would not have understood them, otherwise.) They educated me with ideas which I now consider the axioms of life. They filled me with the spirit to discover and promote new ideas which could be used to help all people, which could make all people happy.

Naturally, when I turned eighteen, registering to vote represented the only responsible alternative. Ironically, I felt the Republicans offered (and continue to offer) the best avenue to achieve what my childhood neighborhood most desired. Who knows, I may yet convert the rest of my family…

While George Bush might get the Abe Lincoln award for honesty, the Democrats have accomplished something more significant. They have won the Reagan Revolution. By outlasting the Reagan administration, they have been able to chip away at the foundations established by Ronald Reagan. By refocusing the nature of the debate, they have convinced a whole country.

When Ronald Reagan first became president, he brought with him an entirely new set of economic thinking. His supply-side economics, much maligned in academia, with the Kemp-Roth plan as its flagship, meant to stimulate our stagnant and inflationary economy. It is doubtful that few of those reading this have not benefited from the economic boom of the 1980s.

But for all the mad money making of the 1980s, we cannot claim that we honestly tested Reaganomics. Sure, we cut taxes. We never, however, really had the opportunity to cut spending. Almost any source – biased or unbiased – will show U.S. government spending has risen consistently throughout the 1980s. Of import, government revenues, with the exception of a slight dip in the early 1980s, have also risen consistently throughout the last decade.

Let’s examine this “slight dip.” Ronald Reagan came to office with a very clear mandate from the American people to cut taxes and cut spending. The slight dip resulted from tax reform legislation passed during President Reagan’s first year in office. Recall those days. The whole country, drunk with the prospect of lower taxes, worried relatively little about the Great Spending Wars of the early 1980s. Those Wars continue to this day; hence, we never saw a similar dip in spending. (Folks, please don’t fall for that favorite argument that military spending embodied the sole reason we could not cut spending.)

Ronald Reagan left Capitol Hill in a helicopter the day of George Bush’s inauguration knowing he had failed to complete a very important task. Worse yet, without the bully pulpit, he could not be expected to defend the continuing accusation coming from the faithful opposition.

The deft Democrats, who never let up their attack on the Reagan administration, have successfully switched the popular focus of the debate from cutting spending to raising revenues. The American people, with the undying help of our nation’s media, seem to have bought this hook, line and sinker.

Nothing signals this more than the current glut of affluence-bashing which appears all around us. The theory behind affluence-bashing deals with the idea that since certain people made out like bandits during the 1980s, they must be bandits. Please don’t read this as a blanket defense of those irresponsible blood sucking LBO artists who now find they can’t pay their bills.

Indeed, you can read this as an indictment of the LBO artists in Congress who have seemed more intent on pointing fingers at Iran-Contras than cutting some of the pork from their political barrels.

So, while the reporters emphasize President Bush’s apparent change of heart, the whole country has begun to debate which taxes to raise. Meanwhile, nestled in the supposedly problem-solving congressional committees they chair, the Democrats can rest assured they have dodged perhaps the last Reagan bullet. Winner #2: The Democrats. (And I’m not very happy about it.)

Next Week #69: The Great Tax Battle of 1990 – Winner #1: George Bush (originally published on July 19, 1990)
Next Week #71: Happy 4^th of July! (originally published on August 2, 1990)

[What is this and why is here? See Interested in Discovering My Time Machine? for more details.]