I cheerfully pay my taxes hoping that the government will use them
to provide the innumerable services it promises: from traffic control
to public schools to protection from enemies foreign and domestic. Like
any business, government cannot forever rely upon borrowing when expenditures
persistently exceed income.
That, however, is the course upon which Mr. Bush, like other presidents
before him, has embarked. His advisers justify this policy by pointing
to Professor Arthur Laffer's theory that lowering taxes will result
in higher tax revenues.
In the harsh reality of a free market economy, however, that assumption
may or may not come true, depending upon whether over 100 million American
households and businesses react to lower taxes with more spending. America's
manufacturing industry certainly did not respond favorably when it lost
2.6 million jobs under Mr. Bush's watch.
He remains undeterred, however, to wit his $2.4 trillion budget for
fiscal 2005. He proposes $1.1 trillion in additional tax cuts over the
next ten years, most of them to take effect by 2009 when somebody else
will be president. For 2005, another debt of $364 billion is to be piled
upon this year's $521 billion, which already exceeds 4.5 percent of
gross national product. For Republicans who might begin to worry, Vice
President Dick Cheney explained that "deficits don't matter."
Never mind that the $179 billion bill in interest on the debt will take
7.4 cents out of every dollar collected or borrowed next year.
Expenditures for the military are to be increased by 7.1 percent, not
including an estimated $50 billion annually for operations in Afghanistan
and Iraq. Homeland Security will get 10 percent and Justice 19 percent
more to bolster the domestic defense against potential terrorists. NASA
remains a priority for Mr. Bush, as reflected in the proposed 5.6 percent
boost for its budget.
Money will be cut from 65 federal programs, including projects to lower
school dropout and illiteracy rates and to tear down dilapidated public
housing. Yet, funding is to be earmarked for "healthy marriages,"
maybe on the assumption that money can buy happiness after all.
Over the next six years, outlays for highways are to be held to $256
billion, $119 billion less than proposed by House Republicans. Other
savings are to be found by fighting "waste, fraud, and abuse."
As if the continuing shortfall in revenues and deficit financing were
not worrisome enough, the Government Accounting Office recently revealed
that 27,000 businesses under contract for the Department of Defense
(DOD) owe $3 billion in taxes withheld from payrolls for Social Security
and Medicare, but not remitted to the Internal Revenue Service (IRS).
Since the Justice Department has allowed these major tax evaders to
escape prosecution for years, it has been suggested that they might
be potential donors to Mr. Ashcroft's political causes.
The Taxpayer Relief Act of 1997 authorized federal agencies to withhold
15 percent of any payments to tax deadbeats, but the Act is obviously
not fully enforced. According to U.S. Senator Carl Levin, last year
DOD should have collected at least $100 million in back taxes but came
up with less than $1 million. Both DOD and the IRS are failing to do
their job. DOD seems more interested in satisfied contractors than in
tax collection, and the IRS claims not to have the full-time officers
needed to deal with major tax delinquents under government contract.
If the news of all the tax cutting and tax evasions depresses you, viewing
the dozens of glossy pictures in the budget compendium will offer you
some comical relief. They show our beloved chief executive at schools
where no child is to be left behind, with the elderly whose medical
care he champions, and out in nature where he enjoys the sight of wildlife
and oil wells.