Let’s read another postcard from the responsibility era, shall we? Here are a couple key grafs from an AP story from yesterday:
Bush said trimming the capital-gains tax rate â now 20 percent for most people â “would pile up some revenues” for the government. That would be a huge help for the administration as it scours the tight budget for money to pay for its proposals to boost defense, education and other spending.
Many economists say the government could make money in the early period of a capital-gains tax cut â as additional people sell their property to take advantage of the lower taxes â but the reduction would be a money-loser for the government in the long run. Republicans say it is a moneymaker because it prompts property sales that would not have occurred otherwise.
Trent Lott pushed the same idea the day before when he told the AP that a temporary capital gains tax cut “would help with revenue that we would have available to the government to spend for our top priorities: education and defense.”
Democrats and Republicans have been batting around the capital gains tax for years, with Democrats arguing equity (and less often, but perhaps more cogently, economic rationality) and Republicans arguing that reducing the tax will make the economy more dynamic, spur growth, and thus (mirabile visu!) perhaps in the long run actually increase tax revenues.
But look closely at these remarks (or even not that closely) and you’ll see that that is not what’s being discussed here. The idea here is to get the quick infusion of revenue which all concede a capital gains tax cut would likely produce in the short term, with little regard to the long-term loss of revenue, and thus long-term fiscal health. Or put another way, it’s stealing from tomorrow to make up for the improvident ways of today.
The real world analogy to this sort of behavior is when you tell your spouse that the mortgage ain’t so hard to manage because, hell, you can probably get a quick $500 selling junior’s coin collection on EBay, right? Or how much easy money you can save if you don’t change the oil in your car.
I guess that’s why they call it the responsibility era.
