The J. Wellington Wimpy Tax Policy

“I’ll gladly pay you Tuesday for a hamburger today,” was a catchphrase made famous by J. Wellington Wimpy , a character in the comic strip Popeye . But it also describes, with slight modification, the attitude of Americans to funding government: “I’ll begrudgingly pay you in the future for services provided today.”

By acknowledging this reality we can see that no President since FDR has ever really provided tax relief—they’ve merely shifted our tax burden to our future selves.

Economist Steve Landsburg calls out President Obama for spreading this nonsensical idea about tax relief:

[Y]our tax burden, according to him, is measured by what you’re paying right this moment as opposed to what you’re obligated to pay in the future.

That’s the only possible interpretation of his statement last night that Tea Partiers (and others) should be thanking him for cutting taxes. The reality is that President Obama, like President Bush before him, has rather dramatically raised government spending and therefore has raised your taxes. To say otherwise is like saying you got your new swimming pool for free because you put it on your credit card.

Once the money is spent, the bill must eventually come due—and there’s nobody around to foot that bill except the taxpayers. We are locked into higher current spending and therefore locked into higher future taxes. The president hasn’t lowered taxes; he’s raised and then deferred them. To say otherwise is—let’s be blunt—a flat-out lie.

While Obama deserves blame currently implementing this policy, the GOP must take the bulk of the credit for creating this myth of the tax cut. For the past thirty years the “tax cuts cure all ills” has been the inviolable principle of many so-called “economic conservatives.” This idea is neither conservative nor economically sound, of course,  but because it has the politically redeeming feature of being wildly popular.

It hasn’t always been this way. While it may be difficult to imagine now, the GOP used to be the party of “deficit hawks” and “balanced budget amendments.” (Seriously, kids, it’s true.) However, now simply complying with balanced budget requirements can make you persona non grata in the party. Take, for example, the strange case of Mike Huckabee. Arkansas has a constitutional requirement to balance the budget. If the citizens demand public services such as highways and prisons (as citizens are wont to do) the state’s constitution requires that the monies be in the state’s coffers to pay for them. To comply with this requirement, Huckabee agreed to a number of tax increases that were necessary to cover the cost of services that were either demanded by the people of Arkansas or by the courts (e.g., he raised the sales tax a total of one-cent over a ten year period to pay for court-ordered spending on education).

While this would have once won him praise by fiscal conservatives (or at least begrudging acknowledgment that he was doing his duty in following the law), it earned him nothing but opprobrium during the 2008 presidential primary. Huckabee was frequently trashed as a “liberal tax raiser” for committing the one heresy that is considered inviolable in the Republican Party: Never raises taxes for anything—ever. (Full disclosure: I served as Huckabee’s Director of Research during his presidential campaign. During that time I became intimately familiar with his record as governor of Arkansas. While there may be plenty of reasons to not like him, the idea that he is a fiscal liberal is absurd. The governor has only himself to blame, though, since he not only refused to justify his record on traditional fiscal conservative grounds but he adjusted his rhetoric to appease the buy-now/pay-later camp.)

Ironically, the result of thirty years of championing the “taxes are evil” line has not only led to an increased tax burden but has made the GOP the less fiscally responsible of the two major political parties. We now have a choice between Democrats, who offer to spend money on us today and raise our  taxes today and Republicans who offer to spend money on us today and raise our taxes (or our grandchildren’s) tomorrow.

Of course, we probably shouldn’t blame them since they are simply giving us what we want—or at least what we wanted in the past. More than two-thirds of our current budget is based on prior commitments that are politically off-limits from spending cuts. Indeed, eighty-four percent of the budget falls into five untouchable categories: Social Security, Medicare/Medicaid, Defense, Interest on the Debt, and other “mandatory” spending.

Now imagine if a group of politicians were to say that we must get serious about balancing the budget by a mixture of significant tax raises on all citizens and deep cuts in each of those “non-discretionary” areas. Americans can’t seem to agree on much, but I can assure you there would be a broad-based, bi-partisan opposition to such a proposal that would make the Tea Party rallies look like an actual tea party in comparison.

The sad truth is that while there are many people who love government spending or oppose tax increases or—as is most often the case—love federal spending and oppose tax increases with equal fervor, there are very few true economic conservatives left in America. There certainly aren’t enough of us fiscal realists to alter this irresponsible situation. Yet we must find a way to increase our tribe and convince our fellow Americans that there are no free lunches. For if we don’t change this Wimpy tax policy soon we may find ourselves running out of Tuesdays.