ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, June 12, 1996 TAG: 9606120018
SECTION: EDITORIAL PAGE: A-10 EDITION: METRO
DO BILL Clinton and Bob Dole imagine that voters can be bought with election-year promises of tax cuts? Maybe so.
Like much of what he has done and said this year, President Clinton's recent tax-cut proposal looks a lot like an attempt to pre-empt his Republican challenger on an issue where the GOP has traditionally enjoyed the upper hand.
Meanwhile Dole, trailing in the polls, is said to be flirting with the idea of a mega-package of tax cuts, possibly including a proposed 10 percent or 15 percent across-the-board cut in income tax rates.
Not only does such pandering, real and rumored, betray both Clinton's and Dole's respectable record on deficit reduction. It also threatens to provoke a game of tax-cut one-upmanship that could inflict long-term fiscal damage, compounding the difficulty of balancing the budget and addressing spending growth in entitlement programs.
Clinton's tax proposal at least has the merit of being somewhat targeted. A $1,500-a-year tax credit to help pay for higher education supports his thesis that education and skill-building are the answers to growing disparity in incomes. As the president told Princeton's graduating class, the nation's objective should be "nothing less than to make the 13th and 14th years of education as universal to all Americans as the first 12 are today."
The tax credit he proposes, however, likely would subsidize many families who would have sent their kids to college anyway. It's not as targeted as it could be - going to households with incomes up to $100,000, for instance. Colleges, meanwhile, might simply raise their fees.
And, more to the point, his proposal would detract from deficit reduction. Last week, in a report about projected entitlement spending, the federal government was urged yet again to get itself out of a future financial hole, not dig itself deeper. Tax cuts ought to be deferred until looming fiscal difficulties are addressed.
Where Clinton would subsidize education, Dole would subsidize pollution, sprawl and oil companies with his proposal to reduce the already low gasoline tax. Even worse, though, would be the sweeping tax-cut proposals he's reportedly toying with. These would cost the treasury hundreds of billions of dollars.
Dole is stalling on and may yet back off from them, for the simple reason that it is hard to explain how he would make up the loss in revenues. Medicare cuts, perhaps?
If he tried to claim that economic growth spurred by the tax cuts would produce enough offsetting revenue, not only would Dole be invoking the discredited voodoo-economics of the 1980s. He'd be contradicting his own record of common sense on budget matters, and opening himself up to the charges of flip-flopping and opportunism that he's leveling at Clinton.
Tax-cut proposals have always been popular in election years, especially since Democrat Walter Mondale lost 49 states in 1984 after admitting he would raise taxes. Dole himself was burned in 1988 when, in the New Hampshire primary, he refused to sign a no-tax pledge that George Bush cynically signed and later violated.
This, however, is no time for a bidding war on tax cuts. Right now they're bad policy. They may even be bad politics, if credibility counts for anything.
LENGTH: Medium: 62 linesby CNB