Back to tax and spend.(PUBLIC POLICY II)

WITHOUT much notice, the Democrats have passed a budget resolution that would allow most of the Bush tax cuts to expire at the end of 2010. Allowing tax rates to snap back to their former levels would constitute the largest tax increase in American history.

The Democrats argue that their budget does not necessarily assume tax increases, although it projects higher spending and budget surpluses that couldn't be accomplished any other way. As Brian Riedl of the Heritage Foundation has noted, the Democrats' budget assumes that revenues will be $721 billion higher than the Congressional Budget Office estimates. That's suspiciously close to the amount of money taxpayers are projected to save if the Bush tax cuts remain in place.

In fact, if one assumes that the Democrats preserve marriage-penalty relief, the child-tax-credit expansion, and the 10 percent income-tax bracket--the cuts they are inclined to keep--then the difference between the two amounts is erased. What's left is a plan to allow the majority of the Bush tax cuts to expire. That means raising taxes on dividends and capital gains, which have become a significant source of income for seniors. It also means big tax hikes for middle-class families.

When the Democrats say their budget doesn't include "tax increases," they're simply playing with words. When confronted with the plain fact that, under their budget, tax rates will be higher in 2011 than they were the year before, they argue that allowing a tax cut to expire is not the same as raising taxes. This sophistry might shield them from immediate political consequences--most people, after all, aren't paying close attention to a non-binding budget document that projects tax increases four years into the future. But it will be interesting to see how far that explanation gets them once higher tax rates force Americans to start cutting into their own budgets.

The Democrats' budget increases discretionary spending by 9 percent, setting aside more money for hundreds of duplicative and ineffective government programs and allowing for the reauthorization of corporate welfare such as the Advanced Technology Program and massively wasteful farm programs. Through these programs, the federal government directly ...