Carroll County Times
Carroll County Times Opinion

Zirpoli: The folly of more tax cuts

As we celebrate the life of President George H.W. Bush, it has been noted by the media that one of the reasons he lost re-election in 1992 to candidate Bill Clinton was because he broke his “Read my lips. No new taxes” promise.

In fact, Bush was responding to rising budget deficits and national debt, and his need to compromise with Democrats on a solution. He signed a bill in 1990 which called for higher taxes, mostly on the wealthy, by raising the maximum income tax rate from 28 percent to 31 percent. This increase paid big dividends for the nation and for President Clinton who, with the help of the 1990 tax increase, was able to record budget surpluses for the last two years of his presidency. Bush’s wise judgment, however, was not passed down to his son, President George W. Bush, who proceeded to undo the work of his father and Clinton by cutting taxes, twice. As a result, our nation’s annual budget deficit and cumulative debt have grown out of control.


The same craziness has been demonstrated at the state level, too. For example, in 2012 and 2013, Republican Gov. Sam Brownback of Kansas promised his citizens that if they drastically cut taxes it would stimulate the state’s economy and lead to an economic boom. The richest citizens of Kansas saw their tax rates cut by one-third. Brownback called his massive tax cuts “pro-growth tax policy” and promised that the cuts would “be like a shot of adrenaline into the heart of the Kansas economy.”

It was a promise Republicans have been making for decades both at the national and state levels: Cut taxes and regulations, and the economy will expand and create millions of jobs. Oh, and the tax cuts will pay for themselves. It has become the Republican motto with predictable results. Brownback’s tax-cut strategy did not work. State revenues plunged, the state deficit exploded, and state legislatures were forced to slash state budgets. Without money to invest in roads, schools, and other basic services, the Kansas economy slowed while the economy in the surrounding states grew.


A study by the University of Wisconsin found that after the tax cuts, job growth in Kansas fell to less than half of the national average by 2017. The financial crisis got so bad in Kansas that the Republican majority in the state legislature voted to roll back Brownback’s tax cuts. Brownback vetoed their bill, but his own Republican legislators overrode his veto. The people of Kansas have seen the light, however. When the Republican candidate for governor, Kris Kobach, promised more tax cuts if elected last month, he was soundly defeated by Democrat Laura Kelly.

Heather Boushey, executive director and chief economist at the Washington Center for Equitable Growth, stated that “The same arguments used to sell the Brownback experiment were used to sell the $1.5 trillion tax cut passed by Congress and signed into law by President Donald Trump last year.”

Trump tweeted, “TAX CUTS will increase investment in the American economy and in U.S. workers, leading to higher growth, higher wages, and more JOBS!” But like the Kansas experiment, says Boushey, “Most of the benefits of the cuts went to those at the top of the income spectrum” and to corporations. And like the results of the Kansas tax cuts, federal budgets have record deficits and the national debt continues to increase.

In the Republican tax cut, corporate tax rates decreased from 35 percent to 21 percent. What did they do with all of their extra money? “First, to companies’ bottom line and second to stock buybacks, which were recently at a record high,” wrote Teresa Ghilarducci for Forbes. “Unfortunately,” wrote Ghilarducci, “corporations have not used the money they’ve saved from the tax cuts to raise workers’ pay.”

Meanwhile, according to the Economic Policy Institute, one year after the Trump tax cuts, the average compensation for the CEO of large companies increased by 17.6 percent. Even while our growing national debt will crush our children and grandchildren, politicians will continue to campaign on tax cuts in 2020 and beyond.

Having made a mistake by pledging not to raise taxes during his presidential campaign, President Bush Sr. did the right thing by raising taxes for the long-term benefit of our nation. Most politicians today, however, are cowards and would never, as he did, risk their careers to do the right thing regarding taxes. Meanwhile, voters are just as short-sighted and ready to vote for the next politician who promises that we can have it all without paying for it.