Bob Dole’s Cheap Talk
by Robert W. Lee

On August 5th, Republican presidential nominee Bob Dole unveiled his economic plan to cut taxes, balance the federal budget by the year 2002, and move the economy from its present 2.4 percent rate of growth to 3.5 percent. The most politically eye-catching plank of the program is a 15 percent across-the-board reduction in personal income tax rates accompanied by a $500-per-child tax credit, which Dole claims would reduce the annual tax load for a family of four earning $35,000 by $1,371 (56 percent). The top capital gains rate would be halved, from 28 percent to 14 percent.

The proposed tax breaks, totaling $548 billion, would be offset by a projected "growth dividend" of $147 billion from additional taxes collected at lower rates in an expanding economy; spending cuts of $393 billion through adoption of the Republican budget plan that President Clinton vetoed; and $217 billion in other cuts, including a $90 billion reduction in agency "administrative costs." The plan also assumes that congressional revenue estimates will be revised upward an additional $80 billion.

Words Versus Action

Putting aside the fact that there is considerable disagreement over how realistic the economic assumptions in the Dole plan actually are, there remains the question of whether Dole can be trusted to actually follow through should he be elected.

Dole has said that he wants to "end the IRS as we know it" by curbing the agency's excesses. Yet the IRS is the menacing bully it is today due to the actions of such politicos as Bob Dole who fortified it over the years. Tax reform legislation approved by Congress in 1986, for example, included many new Dole-backed IRS powers which amounted, in the words of a spokesman for the accounting firm Peat Marwick, to "a nuclear arsenal of penalties." Dole's current campaign rhetoric is aimed at an IRS problem that he himself helped to create. His record is replete with similar chicanery.

Consider the gasoline tax. On April 26th of this year, Dole wrote to President Clinton demanding repeal of the 4.3 cents-per-gallon increase enacted as part of the President's 1993 "deficit reduction" program. Yet Dole himself had over the years supported sundry gasoline tax hikes. On December 23, 1982, for instance, he helped terminate a filibuster led by Senator Jesse Helms (R-NC) against a five cent increase in the tax, then voted for the bill that raised the tax from four to nine cents per gallon.

This June, shortly after firmly declaring that "we're going to make it [repeal of the Clinton gas tax increase] permanent," Dole backed down and pulled his repeal legislation from the Senate calendar. It is no longer included on his tax-cut agenda.

In 1982, Dole was the driving force behind that year's jumbo tax increase. President Reagan had firmly pledged not to seek a tax increase of any sort that year, but Dole was instrumental in persuading him otherwise. Dole told the Wall Street Journal (July 12, 1982), "This year we are raising taxes as a part of the budget process because we need to cut record deficits projected for the next few years, and because we can't do the whole job on the spending side." Needless to say, despite the tax increase, federal deficits continued to swell. That same year, current House Speaker Newt Gingrich (R-GA) branded Dole "the tax collector for the welfare state."

Dole regularly claims in campaign speeches that President Clinton was responsible for "the biggest tax increase in the history of America" (the 1993 "deficit reduction" legislation). The White House, on the other hand, claims that the largest tax increase was that orchestrated by Dole in 1982 as chairman of the Senate Finance Committee. When inflation is taken into account (using 1993 constant dollars), Dole does indeed emerge as the tax champ, assuming that Mr. Clinton is credited with what Congress approved rather than what he proposed. Adjusted for inflation, the 1982 tax increase totaled $260 billion over five years (the biggest boost since World War II), while in 1993 Mr. Clinton proposed raising taxes $266 billion over five years, only to have Congress cut the amount back to "only" $241 billion or so.

In campaign speeches, Dole stresses his support for Social Security by reminding his audiences of the key role he played in "saving" the program from pending bankruptcy in 1983. The key aspect of that year's resuscitation was an increase in the payroll tax so hefty that most American taxpayers today pay more in Social Security taxes than in income taxes.

In 1984, Senator Dole helped ram through another $47.7 billion tax increase (again in the name of "deficit reduction"). And in 1990, he pressured President Bush to abandon his promise not to raise taxes, just as he had pressured President Reagan eight years earlier. In the words of the 1994 Almanac of American Politics: "During the 1990 budget summit talks, he helped ditch Bush's capital gains cut and thus increased pressure for income tax raises; Bush ended up repudiating the budget summit agreement in the 1992 campaign, but Dole didn't."

This year's GOP vice presidential nominee, former congressman and cabinet secretary Jack Kemp, once said that Dole "never met a tax he didn't like." In 1988, when he was challenging Dole and George Bush in the presidential primaries, Kemp declared: "When [Dole] talks about the future it's time to grab your wallets." Kemp further asserted that he was "convinced that Senator Dole has a secret plan to raise taxes on the American people."

The Whitman Model

In promoting his 15 percent tax-cut proposal, Bob Dole has cited New Jersey Governor Christine Todd Whitman as providing the model he is striving to follow. Whitman was elected governor in 1993 after pledging to cut the state income tax by 30 percent over three years.* While praising Whitman's tax policies, Dole downplays her ultra-liberal stance on other issues, including her advocacy of gun control and easy abortion. In 1994, defining herself as a "Rockefeller Republican," she surmised that it might take an electoral debacle similar to Lyndon Johnson's crushing of Barry Goldwater in 1964 (she backed Nelson Rockefeller against Goldwater for the GOP nomination that year) to extricate the GOP from the clutches of its conservative wing.

* Bob Dole has made trust an issue in the campaign, claiming that he is worthy of the voters' trust while Bill Clinton is not. Yet neither the capricious Dole record on taxes, nor his similar inconsistencies in many other areas, justifies such confidence, especially among conservatives and constitutionalists.

Campaigning alongside Whitman on August 22nd of this year, Bob Dole declared that he wanted to do for the United States what Whitman had done for New Jersey. It is not yet clear, however, just what the governor's tax cuts have done, or will do, for her state.

Whitman made the first installment on her tax promise in March 1994 by signing a five percent tax cut into law. As reported by Facts on File for March 17, 1994, the $285 million in tax cuts "were to be offset by reductions in medical-insurance outlays for state employees and the poor and by surplus funds set aside under [former Governor James] Florio's administration." In June of that year, she signed a 1994-95 budget that included another ten percent income-tax rate reduction. But shortly thereafter, during a radio interview on September 29th, she conceded that she would not be able to fulfill her 1993 tax-cut pledge within the three-year time frame. In January 1995, she unveiled a state budget for fiscal 1995-96 that called for a reduction in the state's work force by five percent (3,350 employees) as a way to meet her tax-cut pledge.

Los Angeles Times staff writer Jonathan Peterson reported on April 16, 1995: "State spending is not falling overall, despite Whitman's call for government that is 'leaner and smarter.'" Indeed, "Depending on which party does the arithmetic, outlays this year will be from $430 million to $1.1 billion higher than Florio's last budget."