Wednesday, March 03, 2010
...they would have to more than double in order to pay for what will be spent under current law, insuring that future generations simply would not have the freedom and opportunity that Americans currently enjoy. According to CBO, by 2050, individual income tax rates would have to be increased by about 90 percent to finance the spending between then and now. By 2082, tax rates would have to more than double with a potential tax rate on the highest incomes of 88 percent. �Such tax rates would significantly reduce economic activity and would create serious problems with tax avoidance and tax evasion.This brings me a real sense of deja vu, as many years ago I was a research assistant to Prof. Craig Stubblebine at Claremont Men's College (now Claremont McKenna College.) Stubblebine was part of the early efforts in the late 1970s and early 1980s to get real spending limits on the Congress. (I arrived in Claremont in 1979, and worked with Prof. Stubblebine in 1981-83.) Known as S.J. Res 56 back then, it passed one chamber only to be shot down in the other chamber with much sleight of hand. They tried again later to get the amendment passed by attaching it to the Gramm Rudman Hollings bill, which Gramm at least supported including the constitutional provisions. But it missed a two-thirds passage by a single vote and was not included, and fervor died with passage of GRH.
(I'll note the spending limitation amendment now proposed -- SLA for short -- is not the same as what was tried thirty years ago. A balanced budget amendment was included in it, waivable by a 60% vote in each chamber. Taxes were limited as a share of national income. In some ways, that bill was closer to the Taxpayer Bill of Rights than is SLA, as its authors admit.)
While I doubt this bill will see the light of day in this Congress, the possibility that Republicans could take over the House of Representatives may make SLA a part of that party's platform for the elections. That will be a cheerful thing, but the 2/3 provision for constitutional change may make this not much more than advertising that that party is taking its spending problem more seriously. It's a good start, but it needs to do more to convince voters it has forsworn its past profligacy.