Bush Proposes Tax Increase!

Last week, the Bush campaign charged that Kerry plans to raise taxes by at least $900b. Of course, Kerry never said that(*); instead, the Bush campaign relied on the logic that if the cost of Kerry’s policy proposals add up to $900b (over ten years) then Kerry must be proposing tax increases of $900b. Conveniently and hypocritically, that assumption fails to acknowledge the twin possibilities of economic growth and deficit spending.

On Friday, Kash pointed out that the direct implication of Bush’s accusation is that Bush himself favors tax increases:

Bush has also ‘said he won’t increase the deficit.’ That means that, following the new Bush campaign logic, any spending increase that he proposes is also equivalent to a proposal to increase taxes. So according to Bush logic, we can now recognize this proposal to increase defense spending for what it really is: a tax increase!

Today, Ron Brownstein makes the same point in the LA Times:

Whoever wins in November may well find their expectations of higher revenues disappointed — forcing tough choices they deny today. But based on the logic behind the Bush campaign ad, Kerry would be just as entitled to claim Bush is secretly planning huge tax increases or massive spending cuts.

However, in an effort to be either even-handed or deceptive, the title of Brownstein’s piece is “Campaigns Playing Fast and Loose With Facts and Numbers” — note the plural of campaign. Fine, Brownstein didn’t write the headline of his piece. But he did write this:

The Bush campaign’s justification for the charge was specious. The Kerry campaign’s response was misleading. And the vast press corps covering the campaign almost entirely failed to illuminate the holes in each side’s arguments.

Brownstein assigns costs, attributable to Brookings’ Peter Orszag, to a number of tax proposals (top marginal rate, estate tax, dividend tax, capital gains tax) that likely fall under the “making over $200,000k” rubric, adds them up, and finds that the “total tab for the tax hikes Kerry has discussed approaches $900 billion over the next decade.” In fact, Brownstein’s own total is actually $810 billion. Shortly thereafter, Brownstein makes it even more clear that Kerry’s camp was correct when it denied Bush’s $900b charge:

So was Bush right for the wrong reason? Not exactly.

For one thing, Kerry also has proposed several personal and business tax cuts that would reduce the net effect of his tax increases. Key among them: a tax credit for manufacturers that add new employees; a subsidy for small businesses that provide health insurance for their workers (by itself, cutting taxes by an estimated $63 billion over the next decade); and a credit to subsidize college tuition (which could save taxpayers about $50 billion over a decade, Orszag says).

More important, while the Bush ad implies that Kerry’s proposals will hit all Americans, each tax increase the senator has proposed so far will only affect high-income families.

Two of those cuts add up to $113 billion, bringing Kerry’s alleged tax increase total down to under $700b (over ten years), and one cut has no dollar amount attached, bringing Kerry’s increases down even further.

In his attempt to be even-handed, Brownstein wandered into misleading. He also spent 20 paragraphs before getting to the crux of the issue at hand, that Bush’s $900b allegation was not “right for the wrong reason.”

Based on Brownstein’s account, Bush’s campaign made an allegation and Kerry’s camp correctly said it wasn’t true. However, if Bush’s allegation had been some other unmade and lesser allegation that it actually wasn’t, then the charge might have been true. But in the real world, not Bizzaro World, Bush’s allegation was false. Yet there’s Brownstein in paragraph one telling us that, “The Bush campaign’s justification for the charge was specious. The Kerry campaign’s response was misleading.”

Before hitting “submit,” Brownstein should remember that he’s a member of the very same press that he admonishes in his final paragraph:

That’s a debate [whether each campaign’s numbers add up] worth having. But it will require a lot more precision and care than anyone involved displayed last week.


(*) Kerry does support rescinding some of the Bush tax cuts, which is in fact a tax increase. Kerry’s plan (scroll down to and expand “Restore Fiscal Discipline to Washington”) is “… To restore fiscal discipline and strengthen our economy, Kerry will repeal Bush’s special tax breaks for Americans who make more than $200,000.”