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"To claim that a tax cut is 'expensive' is really to say that government is entitled to keep every penny earned by every taxpayer."

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Conservative Spotlight: National Taxpayers Union

“To claim that a tax cut is ‘expensive’ is really to say that government is entitled to keep every penny earned by every taxpayer.”

“I remember in 1988, when Pete du Pont talked about private Social Security accounts, he was an outlier in American politics. Now there are some holdouts on the left,” said John Berthoud, president of the venerable National Taxpayers Union (NTU). Since 1969, NTU and its affiliated National Taxpayers Union Foundation have worked to keep taxes down and government small. Though the federal government remains enormously bloated and taxes immorally high, conservatives have won some crucial policy debates and are about to win another, this time on creating personal Social Security accounts that individuals can invest. NTU has played a key role in providing the arguments that helped conservatives win the tax debates of the past, such as indexing income taxes for inflation and cutting high marginal tax rates on top earners. Soon demographics will force the hands of those in Congress who would rather not pass legislation establishing personal accounts for Social Security. “The transition from a youthful to an aging society is perhaps the most fundamental demographic change our nation will ever experience,” says NTU in the 2001 Entitlements and the Aging of America it produced with the Center for Public Policy and Contemporary Issues at the University of Denver. “It promises not only to redefine our cultural and geopolitical self-image, but also to push a growing share of our national resources toward an ever-larger elderly population whose ‘entitlement’ to public benefits has come to rest on age alone.” When it comes to certain issues such as this one, said Berthoud, the alternatives to conservative ideas–huge tax hikes, for example–just aren’t plausible. “I think when you look 15 to 20 years down the road, the triumph of our ideas is inevitable,” he said. Another dramatic reform notion that has a rockier path but has gained steam is switching from an income-based tax system to a more rational consumption-based system. “It’s time to push the tax code over the cliff,” said Berthoud, who named the federal income tax as the one tax he would most like to abolish. “We should have a national sales tax instead.” Since taxing something discourages its production, abolishing the income tax would lead to greater income generation. Americans would have a measure of control over how much tax they paid, and a rebate would prevent the tax from being regressive on the poor. One popular plan, the Fair Tax, “would still be a progressive tax system, just not as progressive as the current one,” Berthoud said. Tax withholding changes Americans’ psychology by obscuring the level of taxation, and even more insidiously, most receive a rebate from the IRS each year, instilling the idea that they get money from the government. Of course, it’s a little bit of their own money back. A sales tax would make taxation “much more visible,” said Berthoud. NTU also keeps track of governments’ more obscure means of satisfying their insatiable appetite for their citizens’ wealth. “More and more politicians at all levels of government have been stretching and abusing the constitutionally outlined power of eminent domain in attempts to generate higher tax revenues, according to a new study released by the 350,000-member National Taxpayers Union (NTU) today,” reported NTU on August 25. For example, says NTU, “a Michigan State Supreme Court decision, which allowed the city of Detroit to uproot families and businesses in the Poletown neighborhood to build a GM factory, has been used by governments around the country to clear the way for ‘redevelopment’ of areas that aren’t seen as generating enough tax revenue.” Sometimes NTU waxes philosophical. In “The Orwellian Language of Big Government,” Mark Schmidt notes, “1984 drew a frightening picture of a future totalitarian state in which Big Brother’s official language of ‘Newspeak’ created its own truths.” One example in the real world is the language used to describe tax cuts. “Politicians often oppose tax cuts on the ground that they are ‘expensive’. . .,” says Schmidt. “To claim that a tax cut is ‘expensive’ is really to say that government is entitled to keep every penny earned by every taxpayer.” Perhaps the most obvious is “equal opportunity” or “non-discriminatory,” which have come to mean their opposite: discrimination against and fewer opportunities for men and members of disfavored races, says Schmidt. Berthoud said that the attitude of the American people toward the wealthy has become more favorable and pointed to surveys about estate tax abolition as proof. “So few people are affected, so why do so many Americans support it?” he asked. He added that making death tax abolition and the rest of President Bush’s tax cuts permanent is a top priority this year.

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NTU may be reached at 108 N. Alfred St., Alexandria, Va. 22314 (703-683-5700; fax: 703-683-5722; e-mail: ntu@ntu.org; website: www.ntu.org)

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Written By

Mr. D'Agostino, former associate editor of HUMAN EVENTS, is vice president for Communications at the Population Research Institute.

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