US Tax Hikes Inevitable, Predicts Former Reagan Advisor

by Leroy Baker, Tax-News.com, New York

09 September 2004

With the Congressional Budget Office predicting a budget deficit of well over $400 billion this year, a former economic advisor to the late President Ronald Reagan believes that America’s taxes will have to rise next year regardless of who will be incumbent in the White House, according to the New York Times.

“Taxes are going up next year no matter who wins the presidency in November,” said economist Bruce Bartlett who also advised the Presidency of George Bush Senior.

“It's out of the hands of politicians.”

Bartlett’s prophesy comes as the CBO, a non-partisan arm of Congress, issued its projection for the budget deficit for fiscal 2004, which it estimates will total $422 billion.

Despite this record figure, the Bush administration managed to celebrate the fact that it was somewhat lower than the more gloomy forecasts made earlier in the year when figures of up to $500 billion were regularly bandied about by experts and observers.

"If we continue with these pro-growth policies, we'll be able to cut the deficit in half in five years," claimed Chad Kolton, a spokesman at the White House's Office of Management and Budget.

However, the figure gave Democratic Presidential candidate John Kerry more ammunition to fire at Bush’s tax policies.

"Only George W. Bush could celebrate over a record budget deficit of $422 billion," said a statement from the Kerry camp.

Nevertheless, Bush remains keen to keep the tax-cutting momentum rolling into a second term and has paid lip service to the prospect of more radical changes to the tax code in his next four years.

"Americans spend about 6 billion hours of paperwork and headache every year on the tax code," the President informed Republican supporters last weekend. "In a new term, I will lead a bipartisan effort to reform and simplify and make fair the federal tax code," he pledged, without elaborating on these plans.

A flat rate of income tax or a national sales tax have been some of the ideas touted by Mr Bush, although the White House has since denied that the latter is being actively considered by the administration.

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