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“Boob bait for the bubbas,” as Andrew Biggs reminds us today at The American, was the late Daniel Patrick Moynihan’s description of how to get Republicans to embrace increased government spending: call it a tax break.
The bubbas are the Republicans “who will support anything that calls itself a tax cut even if it walks, talks, and quacks like government spending.” The “boob bait” is, well, you get the picture.
Republicans have had boob bait set in front of them many times since Moynihan talked about it – and they’ve fallen for it almost every time.
They have not only fallen for it. They’ve found themselves bound to it by Americans for Tax Reform's taxpayer protection pledge that they've signed. ATR’s pledge not to raise taxes allows – encourages, actually – using breaks in the tax code as a way to keep rates from going up.
So what’s the net effect of all this tax code manipulation? Biggs reports:
Tax expenditures have grown by about 24 percent relative to the size of the economy since 1974, from 5.8 percent of GDP to 7.2 percent. So not only do tax expenditures add to overall government spending, they’re adding more today than they did 37 years ago.
So how much spending is this? $1.08 trillion. Biggs writes:
That $1.08 trillion in tax expenditures is 24 percent of all federal spending, and is all off the books, allowing a much bigger government than official statistics tell—and much bigger than people might be willing to tolerate if they knew
These expenditures are the 900 lb. gorilla sitting over there in the corner every time you hear Republicans say they are for “comprehensive tax reform” - something just about all leading Republicans say we should pursue if we're successful in beating Obama next year.
Getting a dollar for dollar offset in tax rate decreases for every eliminated tax break will be next to impossible given how many thousands of provisions we’ve allowed into the tax code. Some group, interest, or industry will see a net increase in their tax liability, and Republicans will once again be tempted to take the boob bait.