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April 17, 2003, 8:30 a.m.
Bush’s Modest Proposal
The president’s tax cut is hardly too big.

By NR Editors

iberals denounced President Bush’s tax cut of 2001 as recklessly large, and they are saying the same thing about his current tax-cut proposal. Republicans Olympia Snowe and George Voinovich are trying to force Bush to shrink the tax cut by more than half. If they have their way, it will only be $350 billion over ten years. But the president’s tax cuts are actually quite modest.

The Congressional Budget Office projects that even if Bush’s plan goes through, average tax rates will be higher at the end of the decade than they were at the start of it. That’s because the tax code automatically jacks up tax rates over time. Bush’s first round of tax cuts merely moderated this trend, and the second round would further moderate it.

The size of the proposed tax cuts should also be judged in relation to the spending increases that Washington is planning. If Snowe and Voinovich prevail, there will be more than two dollars of new spending for every dollar of tax cuts in the budget. One federal program, Medicare, is slated to get $400 billion over the next decade. That’s more than Snowe and Voinovich would allow in tax cuts. President Bush’s full tax cut is not too much to ask — especially since it, unlike federal spending increases, would help the economy.