SYNOPSIS: Gore's tax plan is a compendium of unexciting, minimalist changes.
The bad news about the detailed economic plan the Gore-Lieberman campaign released last week is that it does contain some smoke and mirrors. The good news is that the smoke and mirrors are there not to conceal the true cost of extravagant promises, but to make a modest, not particularly exciting plan sound like something more.
Never mind those 192 pages of good intentions. There are really only two important components to the plan: an extension of Medicare, mainly to provide prescription drug coverage; and "targeted tax cuts," tax breaks that reward families for all sorts of good behavior.
The extension of Medicare coverage is actually a conservative measure, in the fundamental sense of the word. America decided 35 years ago to guarantee health care to older citizens, and while some politicians may dream of turning back the clock, they won't say so in public. But pharmacology has come to play an ever more important role in modern medicine; health insurance that does not pay for prescription drugs looks less and less like the universal coverage most people support. So there's nothing radical about trying to plug that gap. Indeed, at this point George W. Bush has grudgingly accepted the principle that Medicare should provide drug coverage; he's just haggling over the price, and trying to keep the insurance companies in the game.
If you want something to complain about in Mr. Gore's program, it's those tax cuts. For one thing, each cut gets touted twice — once as a tax break, then again as part of a program to promote truth, justice and the American way. And it is an understatement to say that the tax breaks are complicated. As best I can figure, they are targeted on a middle-income widow with many children, all about to enter college, who does not receive health insurance from her employer, is enrolled in a training program, drives a fuel- efficient car and is about to inherit a farm.
But I'm not sure I got it right. Actually, I find Republican claims that Mr. Gore has understated the cost of his plan bizarre; it's far more likely that his plan won't actually cost as much as he says because many people who are entitled to claim tax credits will never figure it out.
Why so complicated?
One answer involves political philosophy. Although you would never know it from the other side's rhetoric, New Democrats like Mr. Gore have clearly renounced the party's old big-government, big-spending tendencies. But they apparently retain a lingering taste for penny-ante activism, handing out a few baby carrots here and there to people who do the right thing.
The more important explanation of Mr. Gore's intricate tax plan, however, is that this is what happens when you try to play mine-is-bigger- than-yours with a shameless rival. Mr. Bush is proposing huge, budget- busting tax cuts, mainly benefiting the top 3 or 4 percent of taxpayers; Mr. Gore wanted to counter with a smaller, far more prudent tax cut that nonetheless showed bigger numbers for middle-income families. The trouble is that because the income tax is mainly paid by high-income families, it's hard to cut it without mainly helping those families (although Mr. Bush made a gratuitous further tilt toward the rich by slashing marginal rates mainly at the top, while leaving the marginal rate on most middle-income taxpayers unchanged). Mr. Gore's economists have tried to pull it off, but the strain shows.
But why is Mr. Gore in such a hurry to cut taxes anyway? After decades of deficits, the federal government has now run an "on-budget" surplus for precisely one year. Can't we wait a couple of years to see if it lasts?
And if and when we do feel that tax cuts are in order, who said that it must be the income tax that is cut? A much easier way to target working families would be to cut other taxes: two-thirds of American taxpayers — the bottom two-thirds — actually pay more in other federal taxes than they do on their 1040's.
So I'm not happy about Mr. Gore's tax proposals: instead of clearly distancing himself from Mr. Bush's truly bad idea, Mr. Gore has tried to meet it partway.
Still, Mr. Bush's tax plan is grossly irresponsible, while Mr. Gore's is merely uninspiring. And this is a case where less than half a loaf is better than one. Originally published in The New York Times, 9.10.00