Higher Taxes? How About Less Spending?

After the pandemic spending binge, Washington is now spending 24.2% of GDP.

Letter to The WSJ. 

"In “A New Approach to Taxes That Pays Its Own Way” (op-ed, Nov. 20), Brian Deese and David Kamin depict a U.S. government starved of revenues and tell us, “The tax system of the 1990s could have financed the government we have today.” But the U.S. tax system of the 1990s collected only about 18% of gross domestic product. After the pandemic spending binge, during which the authors’ Biden administration didn’t have spending pay its own way, the federal government is now spending 24.2% of GDP.

They tell us that the 2017 tax cut went largely to high-income individuals. But the nonpartisan Joint Committee on Taxation found that it made the world’s most progressive tax system even more progressive. As to their argument that more tax cuts should go to low-income individuals: refundable tax credits to people who don’t pay income tax is welfare, not a tax cut.

The Deese-Kamin argument for corporate tax increases has appeal only because people don’t understand that a corporate tax first falls on consumers, and then on workers and owners. Some 70% of corporate America is owned by your public and private pension funds, 401(k)s, IRAs and annuities. Finally, they call for a new federal property tax on the appreciated value of your home, your retirement plan and your other assets. It makes you wonder if there is really anybody who thinks the fruits of President Biden’s spending binge are worth all this.

Phil Gramm and Mike Solon

Helotes, Texas, and Alexandria, Va.

Mr. Gramm was chairman of the Senate Banking Committee.

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