Fiscal Policy

The stock market's recent volatility has probably made a lot of investors thankful for good ole U.S. government bonds. U.S. Treasury securities are perfect places to park savings while the market settles down. What many of them don't realize, however, is that the U.S. Treasury market may not be around that much longer.

Democrats are already lining up in opposition to the President's plan to reform Social Security. Bush has put forth only an outline of what he proposes to do-allow workers to use part of their payroll tax to fund private investment accounts, which, upon retirement, would be used to help augment Social Security benefits. Beyond that, the President intends to leave the specifics up to a bipartisan commission.

George W. Bush could greatly improve his $1.6-trillion tax-cut proposal by combining it with an issue that has been absent from recent political discourse: tax reform. By taking the lead on reform, Bush could capitalize on dissatisfaction that transcends party lines and alleviate the burdens on the nation's 128 million taxpayers.

These prepared remarks were presented by John D. Shilling at New America's Working Group on International Finance and the Environment, held in December 2000.

The full text is available below in PDF format.

Should death be taxed? Congressional supporters claim that this is the issue that was at the core of the failed legislation to repeal estate and gift taxes. Certainly this type of an exit tax would seem not only morbid but unfair. But estate and gift taxes are hardly a tax on death; most people who die don't pay them, and some people who are living do.

The latest in gimmicky government policies, the much-touted but meaningless "lock box" has taken the US by storm. The president, prominent Republican members of Congress and the main presidential contenders have advanced a flood of lock-box proposals, which aim to "save" Social Security and Medicare by protecting -- or locking away -- their revenues from the rest of the government.

The annual deadline for filing income tax returns came and went last week with surprisingly little of the usual fanfare and political grandstanding. Lest one be tempted to think that the quiet surrounding Tax Day was mostly due to the good economic times, a more convincing explanation may lie in the widespread ignorance that the largest levy that three-quarters of American families now pay is not the income tax, but the regressive payroll tax.

Democrats have long been tarred with the "tax-and-spend" label. Yet, as President Bill Clinton's recently released budget demonstrates, they might be better described as the "tax-and-credit" party. Still chastened by policy defeats in the mid-1990s, the president and congressional Democrats have shied away from new spending programs and instead proposed targeted tax breaks for health care, child care, education and other social aims.

If there is one thing that most everybody agrees upon regarding the ideological legacy of the Clinton presidency, it is that there is none. President Clinton, left and right typically concur, is a man of polling and expediency, and almost infinite flexibility of viewpoint. A subset of this thinking, indigenous to the left, holds that Clinton does stand for something, sort of, but it's really nothing more than warmed-over Republicanism.

The medically uninsured have always been with us. Yet, they have not always been a cause for civic alarm. As a national issue, their plight has drifted into view only episodically, rarely with tangible results. Many thought this would change when President Bill Clinton proposed his ambitious health plan in 1993. But within a year, his proposal had been crushed and the issue seemingly forgotten--the fate of countless efforts to achieve universal coverage in the past.