Presidential election spotlights inconvenient truth about tax cuts

By Marsha Mercer

WASHINGTON — It wouldn’t be a presidential campaign without charges that Democrats will raise your taxes.

Here’s Republican John McCain last week: “They’re going to raise your taxes by thousands of dollars per year — and they have the audacity to hope you don’t mind.”

When McCain’s remark was played during the Democratic candidates’ debate in Philadelphia, Hillary Clinton rewarded it with one of her trademark guffaws, evidently amused by the reference to Barack Obama’s book, “The Audacity of Hope.”

But accusing Democrats of being tax-and-spend profligates doesn’t pack the punch it once did. President Bush has run up record federal deficits with his stubborn insistence on tax cuts despite extravagant spending on the war in Iraq. Besides, to hear the Democrats, you couldn’t vote for higher taxes — except for the filthy rich — if you tried.

At their last debate, Clinton and Obama left almost no taxpayer behind.

Tax cuts

Here’s Clinton: “I am absolutely committed to not raising a single tax on middle class Americans, people making less than $250,000 a year.” She has a package of $100 billion in tax cuts to help people afford health care, long-term care, take care of their parents and grandparents and other worthy causes.

And Obama: “I not only have pledged not to raise their taxes, I’ve been the first candidate in this race to specifically say I would cut their taxes.” He conceded there were some instances when people who make over $200,000 might have to pay higher taxes.

Listening to such talk from the three major presidential candidates is like eating marshmallows right from the bag. You know you’re going to feel rotten later, but every bite is sweet and soft and so easy to swallow.

All candidates steer clear of repeating the mistake of former Democratic presidential nominee Walter Mondale. He confessed during a candidates’ debate in 1984 that he’d have to raise people’s taxes and said President Reagan would too. The difference was that Reagan wouldn’t admit it, Mondale said. Reagan ridiculed the idea, and Mondale was finished.

McCain has changed his tune on tax cuts. He now supports making permanent the Bush tax cuts he once voted against. He used to say he’d balance the federal budget by the end of his first term, but now the presumptive Republican presidential nominee says it will be by the end of his second term. Maybe.

He also wants to cut the corporate taxes from 35 percent to 25 percent and have a “gas tax holiday” this summer — conveniently before people go to the polls. His campaign says he’ll offset all these goodies with spending cuts, but details are hazy.

Medicare, Social Security

No presidential contender tells people to eat their spinach, but here’s an inconvenient truth that has nothing to do with Al Gore. The first of the 78 million baby boomers turns 65 in three years, and the next president likely will have to deal with the dire financial straits facing Medicare and Social Security.

McCain, striking a populist note, said last week he wants to means test the Medicare prescription benefit.

“People like Bill Gates and Warren Buffett don’t need their prescriptions underwritten by taxpayers,” he said.

McCain is right to put the idea on the table. His proposal wouldn’t just hit the super-rich, though. He would tap individual seniors with incomes above about $80,000 and couples with incomes above $160,000 to pay higher monthly premiums for their drugs. Wealthier seniors already pay higher premiums for doctor’s visits and outpatient hospital care. Critics say means-testing benefits could lead to dismantling the health care system for the elderly.

My guess is McCain’s proposal is unlikely to survive the powerful seniors lobby. But we can’t keep putting off the hard conversation about entitlements. We need proof that, as Clinton’s campaign Web site says, “Medicare will remain exactly as it is, but seniors will have higher quality health care at a lower cost.”

Insolvency

Medicare faces insolvency in 2019 — meaning not that the program will cease but that it will need help paying for hospital stays and other services. This is a serious and important subject, but it’s complicated.

It’s easier to talk about candidates’ gaffes and goofs than to tackle their plans to save Medicare. It’s easier to promise tax cuts.

X Marsha Mercer is Washington bureau chief of Media General News Service. Distributed by Scripps Howard News Service.