Bush Can Win If He Runs Against Taxes and Means It

WASHINGTON. — Washington -- Last weekend, President Bush met at Camp David with his top political advisers to plan strategy for an expected re-election bid. While the success in the gulf war and the rapprochement with the Soviet Union will be at the top of the list of accomplishments trumpeted by the administration, the president should return to the bread-and-butter domestic issues taxing and spending that he abandoned in last year's fraudulent budget agreement with Congress.

That agreement reduced neither spending nor taxes. Instead it raised both at the federal level and caused state and local governments to follow suit.


As Rep. Bill Archer (R-Tex.)notes in the current issue of Policy Review,liberal Democrats have obtained a free ride in the press with their contention that the ballooning deficit was caused by tax cuts for the rich in the 1980s under Presidents Reagan and Bush,that federal spending on social programs was greatly reduced,and that family income declined. None of this is true and the administration needs to say so.

Many Americans don't understand economics beyond their own pocketbooks,so the issue of taxing and spending needs to be put in terms they can comprehend.


Take,for instance,my recent New York City hotel bill. For a one-night stay,in addition to the room charge,the following taxes were levied: $7.65 city occupancy tax; $6.35 state occupancy tax; $2 city room tax; $10.52 state sales tax. In addition there were federal and state taxes on phone calls and food as well as newspapers and other items purchased in the gift shop.

Then there's the $4 bridge and tunnel toll and horrendous taxes for people who actually live in New York.

Yet,New York Gov. Mario Cuomo says New York is "broke to the marrow of its bones." New Yorkers (and other Americans)have a right to ask why government can't live within its means like the rest of us.

The answer is that government seeks to placate interest groups by taxing the productive to subsidize those who are unproductive. So Congress last year passed a luxury tax to "soak the rich." Did the rich get hurt?

Not in Ft. Lauderdale where at G.M. Infinity Boats,15 percent of the work force has been laid off due to a 65 percent decline in boat sales. A survey of the luxury boat industry shows that overall the sale of new boats has dropped 73 percent and industry employment is down 29 percent. The rich have simply stopped buying new boats and many workers have lost their jobs.

Declining sales are also reported in luxury car showrooms. The government doesn't get the revenue it wanted and workers lose their jobs,denying government additional taxes and costing it unemployment compensation,welfare and food stamps. This is always the way things are when government thinks it can fund its pay increases and pet projects out of the pockets of people who produce real products and services.

State governments,which are feeling increased financial pressures,cannot blame the federal government for their plight. As Stephen Moore of the CATO Institute notes in the July 29 issue of National Review,state governments used the increased revenue under the expanding economy of the '80s to fund expensive new programs.

Mr. Moore says spending was bipartisan. Republican governors like John Sununu of New Hampshire and Democrats like Michael Dukakis of Massachusetts and Mario Cuomo funded new programs and increased budgets on existing ones.


"Average state budgets rose by a brisk 104 percent in the 1980s," he writes. "But in California and Virginia, spending climbed by 120 percent;in Massachusetts and New Jersey,135 percent;in Connecticut and Florida,170 percent. Today,all of these once highly esteemed states are awash in red ink;none of them seems nearly so innovative now."

And what did these states get for their or, more precisely,our money?More bureaucracy,particularly education bureaucracy,even though school enrollment at all levels generally declined. The U.S. "population grew by 9 percent in the 1980s,but state employment grew by 19 percent." Mr. Moore writes,"There are now 150 state employees for every 10,000 citizens an all-time high."

California,under Republican Gov. Pete Wilson (who was praised for his tax-and-spend policies by Democratic House Speaker Willie Brown;Democrats love Republicans who do their dirty work for them), managed to raise spending $6 billion,or more than 10 percent,the largest single year increase in the history of state government.

And what will it be used for? Not to reduce the deficit. Those new taxes on junk food and other products will go to fund new spending programs.

In the 1970s,Ron Paul,a Texas obstetrician with no previous political experience,won a congressional seat with a campaign slogan,"Let's Put Big Government on a Diet." That slogan ought to be revived and used by President Bush in the 1992 campaign.

He should refuse any more "budget summits" with Congress,which have always resulted in bigger burdens for the taxpayers,and take the issue of taxing and spending to the people,asking them to give him a Congress that will live within its means like most Americans must do.


Then he should set the example by vetoing all new taxes and spending until Congress agrees not only to cut the bull about "tax fairness" but cut the spending as well. It's a winning issue if the President will make it his own and refuse to compromise.

Cal Thomas is a syndicated columnist.