The pain of taxes

This is a slightly modified form of the comment I posted for a recent post by RNance at the Think It Over blog.

No one likes to pay taxes.  The problem is, people want good services from government, too.  They just think that the people down the street should be the ones paying for them. (Or the people in a less prestigious suburb.)

The tax cuts that have actually been implemented so far were those targeted to middle-income brackets that the Democrats in Congress got inserted into the tax packages that Bush passed.  The largest cuts for the highest brackets are only beginning to kick in, and their impact on the deficit is enormous.

One could make a case that, since the very higest income brackets got a very disproportionate share of the economic benefits of the 1990s expansion, the general public shouldn't be especially concerned about providing them new tax subsidies.  But to hear Republican politicians tell it, almost nothing is quite so painful to the richest Americans as paying taxes to support their country.

Speaking of which, one reason that Bush's credibility on the Iraq War and the "war on terrorism" is plummeting is that he hasn't asked any real general sacrifice.  These were supposed to be wars where we could have glorious victories without any of the comfortable being discomforted.  Now it's pretty obvious that there's a lot of discomfort involved.  The pain of dealing with the enormous deficits is even being felt already in higher gas prices resulting from the falling dollar.

On the latter point, economics writer Robert Kuttner has a good analysis in the current issue of Business Week:  The Real Reasons for Your Pain at the Pump 04/19/04 issue.

Bush is pushing for more tax breaks and regulatory waivers for domestic oil and gas drilling [apprently the Bush dynasty's solution for all problems! - BM]. Yet in all this public debate, hardly anyone is talking about what is probably the most important reason behind the current runup in oil prices -- the weak dollar. ...

The dollar has again lost a large part of its value (over 40% against the euro since 2002, and more than 20% against the yen). For oil-producing countries, this equals another enormous revenue loss, and they are raising prices to make it up. Indeed, if oil were priced in euros, OPEC's revenue per barrel would not have taken a hit. In addition, as in 1973, Arab nations are less than thrilled with Washington's Middle East policies. Once again, gasoline prices are soaring.