Beginning of the End for the Taxpayers' Golden Era Starts Tomorrow

Tomorrow the House of Representatives will vote on legislation to increase taxes for the first time since 1993. It took just 13 days of new found power for the Democrats to raise taxes. The first vote of the 110th Congress removed the 3/5 supermajority to raise taxes. The following day was a vote to enact a new rule requiring offsetting tax increases for every tax cut.

So it was only a matter of time before the first actual vote to raise taxes came up. The significance of this should not be underestimated as tomorrow's vote is the first step in reversing what could be considered the best run for American taxpayers since the creation of the income tax. Using the Treasury Department study by Jerry Tempalski we count the longest run between legislation being enacted into law with a net tax increase occurring from 1952 through 1966. The 15-year period is slightly longer than the current 13-year period but it is our hope President Bush will veto these tax increases through 2008. After 2008 all bets are off and $586 billion of tax cuts are in the pipeline from 2008-2016 making them ripe candidates for repeal.

Although the current period is less than the record from 1952-1966, some of those tax increases could have been phased in over some years (the scoring procedures back then were very different). Furthermore, the federal government has also been cutting taxes at an unprecedented rate with Bush signing at least one new tax cut each year (see chart above). In fact, since the last tax increase in 1993, a total of $2.28 trillion of tax cuts have been enacted starting in 1996 and lasting through 2016. The bulk of these tax cuts, 88 percent, have been enacted starting in 2001 with the election of President Bush.