Bush Campaign Lies

Sunday, March 14, 2004

Bush Campaign Lie #6: Kerry Will Raise Taxes By 'At Least $900 Billion' 

In an ad released on March 11, a woman's voice states 'John Kerry's plan [for his first 100 days in office]: To pay for new government spending, raise taxes by at least $900 billion.' This is misleading in a number of ways. For one thing, it makes it sound as though the $900 billion figure is included in a write up of Kerry's plan for the first 100 days. It isn't.

Let's lay out how the Bush camp arrived on this figure. They seem to argue the following:

  1. Kerry is proposing a new health care plan which will cost $900 billion.
  2. Kerry is also proposing to cut the budget deficit in half in four years.
  3. He can't do both without raising taxes.
  4. Therefore, Kerry will raise taxes by $900 billion.
Does that logic seem airtight to you? If not, then read the Bush arguments for yourself, and you'll be even less convinced. They cite a study by Emory University health care economics professor Kenneth Thorpe which estimates that Kerry's plan would cost $895 billion over ten years. They also claim that Kerry accepts this figure, and it appears that he does, even though in his detailed description, he claims it will cost $360 billion over 5 years. Anyway, let's assume the $900 billion figure (item (1)) is accurate.

And item (2) is accurate: Kerry does hope to cut the deficit in half during his first term of office. So does it follow that he must raise taxes by at least $900 billion?

Of course not, and the Bush campaign can't offer convincing evidence that he must. To be clear, it is important to keep in mind that Kerry has specifically stated that he will roll back the Bush tax cuts for those with incomes over $200,000, reform the estate tax, and close some corporate tax loopholes (as well as cutting taxes for the middle class). So it's not enough to prove that Kerry must raise taxes, but that he will raise them by $900 billion. The data they give doesn't come close.

They quote Howard Dean and John Edwards stating that Kerry's plan will worsen the budget deficit. But that's a far cry from proving a $900 billion tax increase, and anyway the Bush camp should be able to reference more objective sources than Kerry's primary opponents. The best they can do is a statment by Peter Orszag of the Brookings Institution that all of Kerry's tax reforms would save '$80 billion to $90 billion a year by 2013.' Orszag says this wouldn't pay for Kerry's health care plan, but $90 billion a year from now until 2013 is $900 billion, which does cover the cost of the health care plan, even using Bush's own numbers.

The most objective discussion I've been able to find so far is presented by Nancy Benac of the Associated Press. It cites the National Taxpayers Union, a group with a definite bias against both government programs and higher taxes, insisting that all of Kerry's initiatives will increase the deficit by $277 billion a year. It also cites Peter Orszag as saying that it's possible to get to $900 billion in tax increases --- not that Kerry definitely will raise taxes by 'at least $900 billion'. On the other side, it cites two other experts --- including Kenneth Thorpe, who came up with the $900 billion figure in the first place --- opining that Kerry can fulfill all of his promises without a huge tax increase.

Kerry's plan is to 'allow every American access to the same health care plan members of Congress get today'. Making accurate estimates about the impact of such an ambitious plan on the need to increase taxes is basically impossible. The plan is far-reaching, which indicates it will be quite expensive, but it also claims to cut waste and enact cost-saving measures, which will reduce the expense somewhat. Add to this the fact that Thorpe's prediction stretches out over a 10-year period, and it's very difficult to say with any certainty what the impact of this plan will be on taxes. Which is why it's a lie for the Bush camp to make it sound as though a tax increase of 'at least' $900 billion is definitely part of Kerry's plan.

11:47 PM