Neff Zone Column

Print Edition: April 7, 2007

WAR TAX NEEDED ?

Recently, President Bush told Americans that "we need to stay the course" regarding the war in Iraq. Now, you could argue that Iraq is such a mess that there is no "course" to stay, but that’s really not the key word here. The key word is "we."

You see, this nation is not at war, only a very small part of it is. Our brave soldiers and their families are definitely in the thick of things, but the vast majority of Americans remain untouched by the war. Sure, there’s a lot of rhetoric and bluster going on, a lot of posturing by politicians, and a zillion hours of media coverage. But when it comes to actual "skin in the game," only a miniscule number of Americans are involved.

This was brought to light in a recent article by Rick Montgomery of the McClatchy Newspapers. Montgomery notes: "Since the start of the Iraq war, Americans have bought more than 110 million cellphones, spent $35 billion on HDTV sets, moved into 5 million new homes, bought about 60 million new cars and trucks and watched the Dow Jones industrial average climb from 8,200 to 12,000 and beyond. Despite bloodshed from a conflict lasting longer than U.S. participation in World War II, life for most Americans has clicked along without personal loss or even higher federal taxes to cover the fighting in Iraq."

The point is that for most of us, being at war is virtually the same as not being at war. "During World War II, rationing of food, cars and fuel -- and the fact that 82 percent of U.S. males between ages 20 and 25 were serving -- helped steel the home front to the struggle," observes Montgomery. That’s not the case now.

Americans have enjoyed federal tax cuts while more than $500 billion in war spending has increased the national debt. Montgomery quotes Bob Bixby of the Concord Coalition, which advocates balancing the budget, who says: "We're anesthetized to the cost of this war because so much of the funding is being put on our national credit card."

"Credit card" is an apt reference because this war is not being primarily funded by current tax dollars, but rather by loans from Chinese banks. This is an insidious "tax" on future generations because while Bushenomics allows us to make minimum payments on the interest of these loans, payment due on the principal will be born by our children and grandchildren.

With this in mind, a proposal laid out in a Detroit Free Press opinion piece this week by Richard L. Hall, professor of political science and public policy at the University of Michigan, is very thought provoking to say the least. In essence, Hall proposes that a "war tax" be levied to pay for the current war which would give each and every American a stake in the conflict.

Says Hall: "The principal purpose of such a tax would be to put politicians -- members of Congress and President Bush -- in a political bind, deservedly so. In advancing such a proposal, Democrats will show that they support the troops, not simply by spending money but by actually paying the bill. They would also have to defend against the charge that they are using the war to raise taxes. Republicans would certainly dislike the tax, but would they vote against a bill just because it finances the very war they support? Would Bush veto a funding bill -- this time risking a military "shutdown" -- that meets his demands for money and discretion, simply because it pays for rather than borrows to fund his war policy?"

Hall cites precedent for such a tax: "In 1967 President Lyndon Johnson asked Congress to approve a special 6% surcharge on individual and corporate income taxes to fund the ‘emergency in Vietnam.’ Johnson's surcharge was ultimately set at 10% of tax liability. This year, an 8% levy would raise close to the $100 billion appropriation needed. At that rate, a two-person household making $25,000 would pay less than $70; one making $50,000, more than $300; one making $75,000, almost $600. Members of Congress would pay a hefty $2,000 on their congressional salaries. All would thus feel the financial bite, and keep feeling it until the Iraq war ends.

More important, each of us should know exactly how much we must pay and then pay it. The war tax should be a separate line at the end of our tax forms, where we each calculate what it adds to our bill. Iraq soldiers, veterans and their families would be exempt.

The purpose of a war tax would not be so much to raise revenue as to hold all of us accountable -- citizen and politician alike. Perhaps those of us who oppose the war but do nothing might be roused from our apathy. Perhaps those of us who passively support the war might be led to rethink our assumptions."

If nothing else, a war tax would generate a national debate about the war and could possibly lead to a solution. There is nothing like hitting people in the pocketbook to force them to pay attention to something.

Auxiliary benefits would be to lessen our dependence on foreign banks and eliminate a future tax burden for our children and grandchildren. It would also be an object lesson for the old truism "you get what you pay for."

You can read Hall’s full article online at http://www.freep.com/apps/pbcs.dll/article?AID=/20070403/OPINION02/704030331/1068/OPINION.

Jim Neff is a local columnist. Comments to neffzone@gmail.com. Read Neff Zone columns online at www.neffzone.com/cadillacnews.