War and Taxes

I just wanted to recommend to readers Ajay K. Mehrotra’s review of the book War and Taxes, by Steven A. Bank, Kirk J. Stark, and Joseph J. Thorndike. Mehrotra concludes that the “recent inability of our political leaders, on both sides of the aisle, to reconcile the price of conflict with the need for shared sacrifice [during wartime] demonstrates the sea change in thinking about tax policy that has occurred over the course of the twentieth century.” As he elaborates,

The first Bush tax cut could be attributed to reasonable beliefs about the proper use of fiscal policy and limited government. Yet, after the terrorist attacks of September 11,2001, when the nation seemed primed to accept the sacrifices of war, most observers anticipated an end to the Republican taxcutting zeal. Indeed, if the past was any guide, the patriotic and nationalistic fervor that followed 9/11 should have occasioned a reversal in Republican thinking about tax policy. “Unlike Pearl Harbor, however, there was almost no talk in the wake of the September 11th attacks of a need to increase taxes to mobilize for war,” write the authors (p. 151). . . .

[A]ny faith that the Bush Administration was sincerely concerned about its wartime fiscal obligations was completely shattered in the spring of 2003. Within a span of a few months, the administration and its congressional allies launched Operation Iraqi Freedom and enacted additional tax cuts that would cost $350 billion over ten years. . . . Political leaders were able not only to fold their actions in Iraq dubiously into their rhetoric about a “war on terror,” they also convinced ordinary Americans of the righteousness of tax cuts. Throughout the remainder of its tenure, the Bush White House continued to maintain its focus simultaneously on tax cuts and military spending for the war on terror . . . .

I highly recommend the entire review, which helpfully puts current US fiscal imbalances in historical perspective.

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