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Policy: Budgets & Deficits

Memo to conservatives: tax cuts are not spending

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Politics,Beltway Confidential,Philip Klein,Taxes,Budgets and Deficits,Spending

Earlier today, I did a roundup of the good, the bad and the ugly of the “fiscal cliff” deal. Though I ultimately believe that the deal is the least bad realistic option, I acknowledge that there’s plenty to complain about. So it doesn’t surprise me to see a number of prominent conservatives come out against it. What has been shocking, however, is that I’m seeing a number of conservative critics blasting the deal for increasing deficits by $4 trillion when about 92 percent of that projected increase comes from tax cuts that they support. Brent Bozell, for instance, issued a statement calling the deal a “surrender,” complaining that “not only does this bill fail to make meaningful spending cuts, it actually spends another $4 trillion we don’t have!” Excuse me? For decades, conservatives have been complaining — for good reason — whenever liberals conflate tax cuts and spending. Now, in campaigning against this fiscal cliff deal, they are following the lead of liberals.

Let’s just take a moment to remember why this is so significant. By describing tax cuts as a “cost” and as “spending” as liberals typically do, it suggests that all income is effectively the federal government’s to keep. Anything less than 100 percent taxation is effectively a subsidy if this line of reasoning is followed to its logical conclusion. However, conservatives have always rightly argued that it’s the people who have the right to their own earnings. When Americans pay fewer taxes than they otherwise would, it doesn’t represent a cost — it represents savings.

This deal does increase deficits by nearly $4 trillion, according to the Congressional Budget Office — but more than $3.6 trillion of that amount comes from forgone tax revenue.

What’s especially bizarre about Bozell embracing the “tax cuts are spending” line of argument is that the whole basis for conservative opposition to any of the deals that have been proposed is that conservatives believe that spending, not revenue, is the driver of deficits. And they want lower tax rates. But by conflating tax cuts and spending, they are giving fuel to the liberal argument that revenue has to be part of the solution.

If conservatives feel the need to oppose this deal, that’s one thing. But in arguing against a GOP “surrender,” conservatives should avoid surrendering rhetorical ground to the left that’s arguably far more significant than any one budget deal.

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Philip Klein

Commentary Editor
The Washington Examiner