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60 IRET Policy Bulletin 1 (1993)

handle is hein.taxfoundation/iretpbul0019 and id is 1 raw text is: February 10, 1993 No. 60 PRESIDENT CLINTON'S TAX(ING) AGENDA - A CHARTER FOR AMERICA, INC.? Although President Clinton's tax proposals have not been formally presented to the Congress, some of the things he may be considering are set forth in his white paper, Putting People First. Other ideas likely to be considered by the new Administration are presented in Mandate for Change1, a volume prepared by some of Mr. Clinton's leading campaign advisers. The tax initiatives that actually emerge from his Oval Office deliberations may differ from those discussed below, but the cast of President Clinton's thinking about taxes is evident therein. A World View at Odds with Reality Clinton's associates seem to think the economy is like a car with a dead battery. All it needs, they say, is a jump-start with a charge of temporary fiscal stimulus, and it will run all right. Unfortunately, a better analogy is a clogged fuel injector, with excessive tax rates on capital and labor forming the sludge. Unless the blockage is removed, permanently, the economy will sputter along at less than peak performance. An Inconsistent Program Clinton's tax and budget program contains a major inconsistency. Clinton has promised to promote investment and growth. He has also promised to promote fairness by raising individual income tax rates on upper income people. There are indications he may seek higher energy taxes as well. These tax increases would be strongly anti-saving, anti-investment and anti-growth. Clinton and Mandate ostensibly would reconcile this inconsistency by using a portion of the revenue from the tax increases to reduce taxes on middle-income individuals, to provide narrow tax credits for incremental investment by businesses, and to pump up federal spending on infrastructure. The anti-growth effects of the tax increases would be substantial. The proposed targeted incremental ' Mandate for Change, Will Marshall and Martin Schram, eds. (Washington, DC, Progressive Policy Institute, 1992). Institute for IRET is a non-profit, tax exempt 501(c)3 economic policy research and educational Research organization devoted to informing the public about policies that will promote on the economic growth and efficient operation of the market economy. Economics of 1730 K Street, N.W., Suite 910. Washington, D.C. 20006 Taxation (202) 463-1400 * Fax (202) 463-6199 . Internet www.iret.org

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