The Afghanistan war surtax gambit

November 24, 2009

Why is passing healthcare reform so difficult? One big reason is that Democrats are trying to pay for a broad-based new entitlement without enacting a broad-based new tax.

As the joke goes, the only real difference between Republicans and Democrats is that the Rs don’t want to raise taxes on anybody and the Ds want to clip only the top 2 percent.

But some Democrats have finally found a cause worth taxing the middle class for: the war in Afghanistan. A group of powerful House committee chairmen are pushing a graduated income surtax. (A Senate effort would tax only the wealthy.)

The twin goals, backers say, are fiscal probity and transparency, especially now that it looks like President Barack Obama will be sending up to $34 billion worth of new troops to Afghanistan.

As Barney Frank, House Financial Services chairman, puts it: ‘It’s important for people to understand how these wars are adding to our deficits.’

Nonsense. The same lawmakers supporting the war surtax also support a healthcare reform plan that is structured to hide long-term costs. No accounting trick is spared. Taxes are front loaded. Some spending is back loaded, while other spending is shunted to a separate bill.

No, the goal of the surtax is to drain public support for a war many Democrats think should be downgraded. And no doubt if this legislative effort proves successful, it would be tempting to eventually make the temporary surtax permanent.

Indeed, the whole effort could be laying the groundwork for a broad value-added tax that many centrist and liberal economists think necessary to shrink America’s long-term budget gap.

But why not take this opportunity to help pay for the war through spending cuts?

It’s inside-the-Beltway wisdom that Congress won’t cut spending. But eventually spending will need trimming to deal with the long-term budget deficit without resorting to currency devaluation or inflation or huge tax increases.

So let’s start now. The war in Afghanistan currently costs some $43 billion a year. As the Heritage Foundation rightly notes, “that sum is dwarfed by the $72 billion in improper payments (i.e. over-payments, payments made for services and goods never received, benefits and tax credits paid to people who didn’t qualify) that the Government Accounting Office said the federal government made last year.” Then there’s $92 billion in corporate welfare and $123 billion in programs that simply aren’t really showing any positive impact, according to government auditors.

Time for Congress to prove the common wisdom wrong and do the unexpected: Cut spending.

5 comments

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And you what suggest finding $34 billion a year by cutting which spending specifically?

Posted by Chi Democrat | Report as abusive

Now that the whole world knows that OBAMA was a part of
the outfit that was lying about> Global Warming, will he
just leave the Whitehouse.
His tresury man Geithiner is being quizzed on the terrible decisions he made.
His Czar Anita Dunn had leave Whitehouse scandalized.
His Cxar Van Jones was pushed out with scandal
OBAMA has no real friend only criminals like Rezko,
killers like Willima Ayers and Bernadine and a bunch
of corrupt people.
Isn’t it about time for them to tell us who sent him and
who paid for that expensive education. (was it taxpers?)

Posted by tess | Report as abusive

[...] original here: James Pethokoukis » Blog Archive » The Afghanistan war surtax … This entry is filed under Group, Income, War. You can follow any responses to this entry through [...]

Guys like Pethokoukis advocate spending cuts when there’s nothing left top cut because he doesn’t care if his poor neighbors go without new textbooks, or fixed roads – or even garbage collection – thugs like Pethokoukis only care that military contractors get a big fat place at the table to gorge up on tax payers’ dollars! No Questions asked – EVER! I hope the Democrats pass this tax bill – I hope that everytime right wingers get an erection over the next poor nation they dream of bombing that the cost of their blood lust is displayed openly and proudly – another little item that thugs like Pethokoukis despise: they don’t mind stinking the joint up, they just don’t want you to know who supplied it…

Posted by Warpublican | Report as abusive

Excellent article. The proposed tax in pur hypocrisy. It has nothing to do with being fiscally responsible, and everything to undercut public support for an initiative the Dems don’t like. Is it any wonder congress’s approval rating is at record lows?

Posted by JohnR | Report as abusive

Maybe they’ll suggest a modest, temporary VAT to pay for the war. Also, let’s not forget about the billions of waste and fraud that Obama found in Medicare which he could cut painlessly.