Much can be and, indeed, has been said about Sen. Edward Kennedy. When it comes to increasing the tax burden of his fellow Americans, however, what can never be said about the nation’s most passionate liberal for more than a quarter-century is that he lacks the courage of his convictions.
Yesterday, in a speech at the National Press Club, Mr. Kennedy called for the postponement of all tax-rate reductions scheduled to take effect in 2004 and beyond. He also proposed that the increased federal revenues resulting from the postponement be immediately spent on a host of domestic, non-defense programs. He is, in effect, calling for the funding of the social welfare programs that are dear to the heart of his party’s leader in the Senate.
Still, if Mr. Kennedy merits an “A” for fighting for his convictions, he deserves an “F” for his economics. Raising taxes in the middle of a recession is contrary to the beliefs of virtually every U.S. economist, regardless of his or her political ideology. Mr. Kennedy argues that delaying tax cuts does not amount to a tax increase. Yet, to accomplish what Mr. Kennedy proposes would require Congress to pass legislation in the middle of a recession, no less that would raise marginal tax rates above their previously legislated levels. Under what conceivable circumstances could such action be considered anything but a tax increase?
President Bush has already made clear that any such tax-raising bill would become law only “over my dead body.” He undoubtedly recalls the consequences of his father’s broken promise of “no new taxes.” President George H.W. Bush, who had pledged not to raise taxes during the 1988 presidential campaign, approved a tax increase raising the top rate from 28 percent to 31 percent in October 1990. That bill also was passed in the middle of a recession. And it certainly contributed to an initially lackluster recovery during which the unemployment rate continued to rise for 15 months after the recession ended in March 1991.
Were Mr. Kennedy to have his way, the top marginal income-tax rate would remain at nearly 39 percent, instead of eventually falling to 36 percent. Other levels would be frozen as well. As it happens, Mr. Bush has already compromised with Senate Majority Leader Tom Daschle and Mr. Kennedy. The president initially proposed tax relief that would reduce the top rate to 33 percent, opting later to compromise at 36 percent. Even that level would still be 8 percentage points above the top rate established in the 1986 bipartisan tax-reform legislation and 5 percentage points above the rate regrettably approved by the president’s father in 1990.
Raising taxes in the middle of a recession, Mr. Kennedy? Been there. Done that. Either rework what passes for your economic growth proposal, senator, or take your “F” and sit down.