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Jewish World Review Feb. 20, 2001 / 27 Shevat, 5761

Thomas Sowell

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Magic transformations

http://www.jewishworldreview.com -- IN this modern scientific age, we no longer believe in magic words that can transform a prince into a frog, or vice versa. But there are still magic words that can cause incredible transformations.

For example, there are words that can transform the most big-spending liberal in Congress, who has for decades been blithely adding to the soaring national debt, into someone who proclaims the need to reduce that debt at all costs. Those magic words are "tax cut." It is like a parlor game where you say one thing and the other person comes back with the first thing that comes to mind. Say "tax cut" to a liberal and the reply is "national debt."

Admittedly, this is not as good as turning a frog into a prince because the frog is only pretending to be a prince. Once the big spenders have fought off or stifled a tax cut, they resume big spending with gusto, regardless of the national debt.

The new twist on this game is to say that the federal surplus that is left in the hands of Washington politicians will be put into a "lockbox" to safeguard it from being spent for anything other than paying down the national debt. This "lockbox" image was first used by Al Gore in last year's election campaign, but it is now being repeated hither and yon by other Democrats who are trying to prevent taxes from being cut.

Who knows? "Lockbox" may take its place in a sort of political hall of fame, alongside other great pat phrases used repeatedly by Democrats, such as "tax cuts for the rich" or "it doesn't rise to the level of impeachment."

But what good is a lockbox when Congress always has the key? So long as the money is in Washington, politicians can spend it. The only way to keep it out of their hands is to put it back into the taxpayers' pockets.

When the big spenders fail to scare us away from a tax cut, Plan B is to make the cut as small as possible. The great ponderous question is raised whether we can "afford" a "big" tax cut.

For these purposes, if taxpayers get back even one-fourth of the surplus, that is called a "big" tax cut.

In other words, after the people have been taxed trillions of dollars more than required to pay for all the vast current spending of the federal government -- and after three quarters of this excess is then used to pay for additional government spending -- it is still "too much" to return the remaining one-fourth to the people who have been over-taxed.

The same politicians who question whether we can "afford" a tax cut seldom -- if ever -- question any spending increases, large or small, on government programs. These programs are all supposedly meeting "needs," while taxpayers who get to keep more of what they earned are apparently seen as just squandering the money.

The scariest part of these political games is the notion that people inside the Washington Beltway should be deciding how much other Americans "need" or deserve. The argument that most of the tax cuts will go to "the rich" ignores the simple fact that the only people whose taxes can be cut are people who are paying taxes. And millions of people in lower income brackets have been exempted. Silly talk about how much some people will "receive" from a tax cut ignores the fact that they are receiving nothing. They are simply keeping money that they earned. Yet politicians have been quoted as saying such things as: "Does Donald Trump need a tax cut?"

Let's go back to square one. Who earned this money? Those who are paying taxes. And what are the taxes being paid for? To support the government. Then why should more money than is needed to support the government stay in Washington, instead of remaining with those who earned it? The principle doesn't change because of how many zeros there are in your income.

Once we start letting politicians decide who needs or deserves how much of their own money, we have taken a very dangerous step down a slippery slope. We first started down this slope in 1913, when a Constitutional amendment established the federal income tax, which applied only to the richest 2 percent of the people and took no more than 7 percent of their incomes. But that was just the entering wedge for something that has now engulfed us all.

Today there is the beginning of another entering wedge, with politicians deciding how much each of us needs and deserves. If they take on this God-like role, are we still free Americans or just their serfs and supplicants, begging for what we ourselves have earned?

JWR contributor Thomas Sowell, a fellow at the Hoover Institution, is author of several books, including his latest, Basic Economics: A Citizen's Guide to the Economy.

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© 2001, Creators Syndicate