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January 9, 2013

The New 'Thirty Years War,' And This One's Over Taxes


History students learn that the Thirty Years War was fought over two competing and strongly held ideological viewpoints, that it was one of the longest and most destructive conflicts in history, and that while the initial focus was fairly narrow, it broadened to encompass a wide range of political and economic issues.

Sounds kind of like the Thirty Years War we in the U.S. have had over taxes.

The U.S. version began in 1981, when Ronald Reagan took the presidential oath of office. Reagan and his followers, both then and now, believed that the best tax system is one where rates are low, broad-based and simple. And that under such a system, business will grow, invest and hire people—all the key ingredients to economic growth.

Reagan engaged in two major tax battles in this Thirty Years War, and won both of them. As a result, the economy flourished.

Then George H.W. Bush was given the role of commanding general after promising to out Reagan Reagan—hence, “Read my lips; no new taxes.”  But two years later Bush surrendered without even much of a fight. Taxes went up, the economy went down, and the anti-tax troops were discouraged and demoralized. 

Which led to Bush losing his command, and an opposing general, Bill Clinton, taking over. Clinton immediately pushed for higher taxes and got them. But Republicans rallied and gained enough troops in the 1994 election to neutralize the enemy. Again, the economy flourished.

When George W. Bush was made commanding general, he won the tax battles but didn’t have the courage or the will to secure the victories for good, which led to what’s known as the Battle of Fiscal Cliff, where the anti-tax forces were routed.

Then, after waving the white flag of surrender, they asserted that the issue is “finished, over, completed.”  But how many times has a conquering army, seeing weakness and smelling victory, backed off from finishing the job?

The pro-tax warriors even went to the airwaves last weekend letting it be known that they have not yet begun to tax.

If the anti-tax troops refuse to retreat, this second Thirty Years War may turn into a Forty or Fifty Years War. But they have to be willing to fight for what they believe in, and assert, with Winston Churchill, “never give in, never give in, never, never, never, never.”


  • TaxBytes-New

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