Magazine article Insight on the News

Enough Compromising, Republican Congress Needs to Slash Taxes

Magazine article Insight on the News

Enough Compromising, Republican Congress Needs to Slash Taxes

Article excerpt

Even as Pvt. Ryan was saved, Americans paid lower taxes than they do today. With World War II transformed into an Academy Awards contest and the Cold War reduced to a CNN retrospective, combined federal, state and local taxes consume 31.7 percent of gross domestic product. In 1944, when American servicemen fought Hitler in Europe and Tojo in Asia, government demanded just 22.8 percent of GDP, according to Patrick Fleenor, senior economist at the Tax Foundation.

But rather than feel the people's pain and cut tax rates accordingly, President Clinton has proposed 81 new tax and fee hikes that will pick another $82 billion from Americans' pockets.

These tax hikes range from the colossal to the picayune. According to Tax Notes, smokers will pay $34.5 billion in tax levies through 2004. Trade associations face a $1.44 billion investment-income tax. New community-property rules will gouge $225 million out or surviving spouses, Rather man encourage savings, higher taxes on "excess" individual retirement account contributions will cost depositors $52 million. A new tax on income from renting one's home to vacationers will vacuum $50 million into Washington. Numerous other tax hikes are too arcane to discuss in a family newspaper.

But Clinton's most pernicious proposal also may be his most deceptively innocuous. A $15 mortgage transaction fee would raise $58 million to update 100,000 flood-hazard maps for the Federal Emergency Management Agency, or FEMA.

It's a mystery why FEMA cannot use private maps produced by, say, insurance companies with a vested interest in preventing flood damage. Better yet, FEMA could stop selling insurance to inhabitants of flood plains.

Even worse, this small fee is a crack in the dike through which a federal property tax someday could gush. If today's $15 fee is okay, why not $50 in 2001 and $100 in 2005? Why should a millionaire send Washington $100 for the mortgage on an estate when young buyers pay the same fee on starter homes? How long before politicians argue that it would be fairer to slap a 5 percent tax on all property?

If this sounds paranoid, remember that the federal withholding tax was enacted in 1943 as a "temporary" war measure. Nonetheless, it soldiers forth today, even while Omaha Beach is populated with tourists. Consider also the federal luxury tax on telephones implemented to fund the Spanish-American War. After all, only rich people owned phones in 1898. Today, while most American homes have more phones than kitchen sinks, that 101-year-old "temporary" federal excise tax adds 3 percent to U. …

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