GOP Tax Cuts: What Effects?

Kevin Phillips’ “The Republican Mania” (Opinion, Jan. 28) rightly points to the dangers of excessive tax cuts and the lobbying pressures that help bring them about. In doing so, however, he severely distorts recent economic history, blaming the Reagan tax cut for the recession of the early 1980s and arguing that a tax cut now would, as the subhead states, “pave the way for a repetition of the 1981-82 recession.” There is no respectable school of economic thought that would support such a conclusion. The recession of the early 1980s was caused by the tight money policies needed to cure the inflationary excesses that had been generated during the 1970s.

If a recession is coming our way, tax cuts this year would be unlikely to head it off. Any such cuts would have neutral to mildly expansionary effects on the economy, not recessionary ones. Current tax cuts should be analyzed in terms of their effects on our tax structures and public finances, not exaggerated claims that they will either cause or cure a recession.

THOMAS D. WILLETT

Horton Professor of Economics

Claremont McKenna College

Claremont Graduate University

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Another example of upside-down, socialist logic. The scenario: Citizens pay taxes into the federal treasury. The treasury is running huge current and projected surpluses. President Bush proposes reducing the flow of taxes into the treasury. Phillips labels the proposal “the Great Treasury Raid.”

How clever--calling the reduction of excessive taxation a “raid.” Phillips’ logic is reminiscent of the Queen’s in “Alice in Wonderland.”

DONALD J. PRADO

Valencia

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Phillips has done a great public service by stating the facts about the Republican attempt to foist a huge, unwarranted tax cut that will have severe negative effects on the economy. Everyone should now know this action will primarily benefit the wealthy and quite possibly contribute to a recession.

I have a suggestion: The Bushies should play it straight by preparing a table showing several income categories and, beside each, indicate the actual amount of the tax cut. Of course, there would have to be the caveat that these amounts are based on averages, with family size, deductions, etc., as variables.

JOSEPH M. ELLIS

Woodland Hills