Allow me to repeat a quote I used in a previous issue (Are We on Europe’s Path?, August 2005) from Heritage Foundation economist William Beach: “A citizenry that reaches a certain tipping point in dependency on government runs the risk of evolving into a society that demands an ever-expanding government that caters to group self-interests rather than pursuing the public good.” Two events this past week sent me back to that quote. One was the report from President Bush’s Advisory Panel on Federal Tax Reform which, despite some positive elements, such as elimination of the alternative minimum tax, lacks the boldness for “simplification” that one would have expected, and is devoid of much enthusiasm for the supply-side principles, primarily tax rate reduction, that have been the drivers of the growth in American wealth and job creation over the past 25 years. The other event was the defeat and reversal (some call it “time out for repair”, but I wonder) at the polls in Colorado of the Taxpayer Bill of Rights law that has propelled that state to unprecedented economic growth over the past thirteen years. Advocates of similar “TABOR” plans in other states should now be concerned that this result will not be beneficial to their momentum.
Why do these things matter? Go back to the Beach quote above. There is a limit to the government dependency that can be sustained by a society that hopes to continue to be self-governing. It would be well to keep this in mind as debates on the various state and federal tax proposals work their way through the body politic.
