August 6, 1999
Washington, DC -- The Clinton administration says the proposed $792 billion Republican tax cut is "excessive," and the Libertarian Party agrees: It's excessively small.
"The only thing smaller than this proposed tax cut is the Republicans' courage," charged David Berglan, the Libertarian Party's national chairman. "Metaphorically, this GOP tax cut is a flea dancing on the back of the bloated elephant the federal budget has become."
How small is the proposed tax cut? It amounts to a mere 3.63% of the gross revenue the federal government expects to collect from taxpayers over the next 10 years, noted Bergland.
According to the Congressional Budget Office, federal revenue will grow from $1.905 trillion in fiscal year 2000 to a whopping $2.725 trillion in 2009. During that 10-year span, federal tax collectors expect to rake in a total of $21.761 trillion.
Of that staggering amount of money, Republicans propose to return a piddling $792 billion -- or 3.63% -- to the taxpayers.
"Do the math: The Republican tax cut is disgracefully diminutive, amounting to a few, insignificant percentage points of overall government revenue, said Bergland. "It amounts to less than four pennies on the dollar. Is that what Republicans mean when they promise a less expensive government?"
Even worse, he noted, the proposed tax cut doesn't reduce the size of government by even those four cents; it merely slows the projected growth rate.
"Under this Republican proposal, annual federal revenue will still increase by at least 38.9% over the next decade. Without the tax cut, it would grow by 43%," said Bergland. "Slightly slowing the growth rate of the federal government is not a Republican revolution -- it's a Republican embarrassment."
And if punny size of the proposed tax cut isn't embarrassing enought, there's more band news:
* The tax cuts are "phased" in, with most of the so-called savings not happening for five to 10 years.
In fact, the first "savings" don't occur until 2003, and even then it's only 1% -- which works out to "about $32 per person, four years from now," according to Llewellyn Rockwell, president of the Ludwig von Mises Institute.
* The tax cuts are conditional on politicians cutting the size of the national debt.
"The Republican tax cut only takes effect if the interest payment on the national debt is lower than one year to the next," said Bergland. "Will that happen? It's unlikely, since Congress is already busting its self-imposed budget caps -- and since an Ohio University study revealed that, over the last 50 years, 74 cents of every surplus dollar has gone for new spending programs. Why should we expect this Congress to be any different?"
* The tax cuts aren't legally binding on future Congresses.
"These tax cuts could be fictional, because Congress can repeal any tax cut next week or next year," said Bergland. "The only tax cuts that would mean anything are ones that take effect right now. If Republicans really wanted to cut taxes, they could do so by repealing the estate tax or the capital gains tax today -- not 10 years from now."
The bottom line, said Berg-land: "These so-called tax cuts are a slow conditional, non-binding, minuscule reduction of future increases in federal tax revenue. If that's the best in the Republican Party can do, they need an increase in courage almost as much as taxpayers need a real reduction in taxes."
(Reprinted the Libertarian Party web site: www.lp.org.)
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