Greg Mankiw argues that Bush kept the following promise:
On principle no one in America should have to pay more than a third of their income to the federal government.
Brad DeLong objects:
In no meaningful sense has George W. Bush reduced the tax burden. In no meaningful sense has he kept any promise. George W. Bush has kept his promise to cut taxes in the same way that a spouse who decides to “save money” by making only the minimum required payment on the VISA bill has kept a promise to reduce household spending. As Milton Friedman puts it, to spend is to tax. Bush’s spending increases – defense, Iraq, the Republican porkfest, the Medicare drug benefit – are still there, just as things you have charged to your VISA don’t go away if you make only the minimum monthly payment. What George W. Bush has done has been to shift taxes from the present to the future – and also made future taxes uncertain, random, and thus extra-costly from a standard public finance view.
It is true that the average long-term tax bite for Americans has been increased under George W. Bush, but that does not necessarily undermine the proposition that the specific promise might be kept. After all, this Administration is hell bent on shifting the tax burden away from the rich and towards the poor. While I have consistently agreed with Brad on the simple premise that these mounting Federal debts are increases in deferred taxes, we have no clue who will pay those future tax bills in the future. While George W. Bush tries to tell us that no one will have to pay more, simple arithmetic says such claims are false.
But what if the future tax increases are levied on middle class Americans and the working poor? Then it is entirely possibly that the promise that no one “pay more than a third of their income to the federal government” might indeed be kept. Alas, few will pay much less than a third either. Of course, this wasn’t Greg’s point. Or was it?