|This suggestion was bound to come sooner or later. We need a war tax. I have a good blogger friend who is way ahead of the politicians saying this quite some time ago. (Visit Doug's Blog - www.unitedcats.wordpress.com !)
Sen. Joseph Lieberman, the only Democrat to support President Bush's Iraq War effort, proposed Tuesday that Congress consider a tax to fund the U.S. war on terrorism and reduce the need to cut domestic programs to pay for security spending.
I believe I missed the news that congress was considering a cut in domestic spending to pay for security spending. If they are indeed doing that, I applaud them. The only thing I have heard along those lines is Democrats grilling the president's budget director and treasury secretary over imaginary cuts in entitlement spending in the budget the president just submitted to congress. They allege that the president has cut over $100 billion in Medicare and Medicaid over the next five years.
Not true, says White House spokesman Tony Snow. "They are not cuts. They are increases on the order of 6.7 percent per year." Budget Director Rob Portman described the "cuts" as "sensible reforms primarily in Medicare that are less than a one percent reduction in the annual rate of growth." Treasury Secretary Henry Paulson said slowing the rate of growth in Medicare spending is "absolutely essential" to avoid major tax increases in the future. Once again, we have some confusion about what constitutes a spending cut.
Beyond that, President Bush and Secretary Paulson insist that the new $2.9 trillion budget puts the government on the path to a balanced budget in five years. They also point out that the deficit has shrunk by 58 percent in the last three years, and that even the Congressional Budget Office (not given to rosy scenarios) predicts the deficit will remain near or below one percent of GDP for the next two years. The average over the past 40 years has been 2.4 percent of GDP.
In short, despite a spike in defense spending because of the war, the current tax structure is plenty sufficient to support the war effort. Also, what Democrats describe as "cuts" in entitlement spending are necessary, not to help fund the war, but to avoid a future fiscal crisis that has nothing to do with the war.
Maybe Lieberman thinks he's the only Democrat with the credentials necessary to propose a tax increase without conservatives attacking him for being a typical liberal. It won't work. Lieberman is a typical liberal on economic issues, and conservatives would be silly to reward his support for the war by threatening the prosperity of the people who are paying for the war.
If anything, it's time for another tax cut. Since 1970, the average total tax burden, (federal, state and local) as a percentage of national income, has been 30.5%. It peaked, at 33%, just before President Bush took office. Since then, it dropped to about 29% and has risen back to about 31.5%, about one percent above the average. Let's just call that one percent a "war tax" and get ready to cut taxes at the next available opportunity.