Is Bush a tax cutter or a tax raiser? A new campaign theme emerges

After signing trillions of dollars in tax cuts into law, Bush has shown an almost-obsessive interest in cutting government revenue. It appears, more often than not, that cutting taxes is not only the most important domestic goal for the Bush administration, it represents his entire domestic policy.

But a new campaign theme appears to emerging — the Bush administration is responsible for raising taxes.

How could a man who recklessly cut two trillion dollars in federal taxes, mostly for the wealthy, be responsible for tax increases? Because when Bush cuts taxes at the federal level, but services are left largely in tact, state and local municipalities have to raise taxes to keep up. As Matt Bai recently wrote in the New York Times, “Cut federal taxes and it’s the governors’ problem. Cut state taxes and it’s the mayors’ problem. One way or another, the tax burden is what’s really trickling down.”

Democratic presidential candidates appear to be picking up on this theme as an effective rhetorical weapon against Bush. John Edwards was the first I’ve seen use this idea in a campaign speech.

“As a direct result of this president’s policies, all across this country people are seeing their property taxes, their sales taxes, their state and local income taxes, and their college tuition bills go up,” Edwards said last week at a speech at Georgetown. “I’m going to tell America the whole story: This president is the reason your taxes are going up. I’m going to cut them.”

Howard Dean picked up on this during his appearance on Meet the Press yesterday, saying, “Most people got hurt by the president’s tax cut and they’re paying more property taxes because of what the president’s tax cut has done to their state and local government.”

Indeed, take a look at a state-by-state synopsis of how taxes and fees are going up dramatically at the state level, regardless of which party controls the state government. Nearly every state in the union has either already raised taxes/fees or is about to.

Americans may not, in general, be up on the latest political events in Washington, but they’re not stupid. Bush will tell them incessantly about all the great tax cuts he championed, but at the end of the day, American families will look at their checkbook and see that their tax burden hasn’t gone down, it’s just shifted.

So, if the Dems’ 2004 strategy will call Bush on raising taxes, what will Bush’s strategy be? It turns out the administration has heard all the talk from the Dem candidates about “repealing” Bush’s tax cuts, and the president’s advisors have used some creative accounting to tell Americans what the repeal would mean to them.

The administration has released a seven-page analysis, drafted by the Treasury Department, which claims that repealing the 2001 and 2003 tax cuts would mean a tax increase of over $1,900 for a married couple with two children and an income of $40,000.

As the Washington Post noted today, the report uses “a highly selective analysis.” The report, for example, conveniently created “hypothetical” models for a changing tax burden by leaving out groups such as single taxpayers, single parents, and lower-income families, all of which gain next to nothing from Bush’s tax policies.

The Bush administration wants desperately for Americans to believe that the “average” taxpayer will enjoy over $1,000 in new tax breaks thanks to the president’s tax cuts, and Democratic plans to undo those cuts would effectively mean $1,000 tax increases for those families.

This is deceptive politics at its worst. As Robert McIntyre recently explained in The American Prospect, “Married couples with children are the only household type whose typical tax cut will (temporarily) approach Bush’s $1,000 figure. Their median tax cut will be $958 this year and next, mostly from the short-term boost in the child credit [which is scheduled to disappear]. But couples with children represent only 22 percent of all taxpayers. Couples without kids will typically get $332. The 42 percent of taxpayers who are single without children will get $50. As for single parents, most earn so little that they won’t even benefit from the temporary child-credit increase; their typical tax cut will be $5.”

Bush can talk all he wants about his efforts to help the “average” American, but voters will still see their checkstubs and know that he’s not telling the whole story.