Democratic Candidates Edwards, Richardson Split on Taxes

The Democratic candidates for president had their first joint news conference (NOT A DEBATE) in South Carolina last week. Shortly after that, many of them addressed California Democrats in San Diego. There, a big fundamental difference between two candidates arose over taxes, and it is a vital issue. Former North Carolina Senator John Edwards said the rich may have to may more in taxes. Governor Bill Richardson of New Mexico disagreed saying he was a tax-cutter. One of the things the Democratic Party needs to decide is just how it intends to fund government in the coming generation.

In the good old days, when the Republicans believed in fiscal responsibility and lost elections because of it, the Democrats would borrow and spend on investments (the Tennessee Valley Authority and rural electrification). After a time, the Democrats realized that handing out money, rather than buying public goods the nation needed, won them votes. Then, along came Ronald Reagan, who noticed the same thing. He promised to stop taxing people while continuing to spend. And thus, the modern two party system was born: the tax-and-spend Democrats and the borrow-and-spend Republicans. Since Mr. Reagan’s election, America’s debt has metastasized, and its future fiscal health is doubtful.

As Herb Stein once said, “if something can’t go on forever, it won’t.” Americans consume much more government than they pay for, and it’s reaching the point where a generation or two may have to pay more for less government just to get back to even. That is a shame, but the alternative could be economic collapse, social strife and further compromise of the Republic’s inherent freedoms. Frankly, paying more for less for a time is a better deal.

Mr. Edwards, coming off his “Two Americas” vice-presidential campaign, is mining a seam in the Democratic Party that thinks the rich should pay a lot more to help to poor. That is especially good for them because more rich people vote Republican, so they aren’t hurting their campaign contributors. The trouble comes because even poor Americans like to think that someday they will be rich, and there’s no way they want to pay 50% marginal rates on their second billion.

Mr. Richardson is taking a more libertarian approach, which mines a very nice seam of anti-authority thinking that pervades the Western US and some of the GOP and swing voters. He’s betting that, if nominated, he can get people to vote for him because they like his policies and they won't pay more in taxes. His problem becomes paying for what he offers with what he demands in taxes.

This is a very worthy debate politically, and financially, it is long overdue. America is genuinely going to suffer for the past thirty years of economic irresponsibility. Today’s kids, on average, will not live as well as their parents, pure and simple. They will be the first generation of Americans about whom that can be said. Whether they are unique or whether a downward spiral has begun that cannot be changed save for dire action is unclear. How to fix the mess is a question for the ages.

© Copyright 2007 by The Kensington Review, Jeff Myhre, PhD, Editor. No part of this publication may be reproduced without written consent. Produced using Fedora Linux.

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