'08 tax plans claim gain without pain

Every campaign season has its quick fixes, its too-easy answers, the improbable promise of gain without pain. This time, tax cuts for the wealthy are the easy target.

Democrats are feasting on them, to the bone and beyond, to underwrite their plans for health care, tax cuts for the working poor and much else that costs money.

Their vow to roll back President Bush's tax cuts for the rich is a surefire applause line. But there's a problem with the bottom line.

Leading Democrats Hillary Rodham Clinton, Barack Obama and John Edwards want to pay for huge chunks of their most expensive proposals by rolling back tax cuts that are set to expire anyway _ and are shown expiring in the government's budget calculations in the years ahead.

"The government isn't counting on that money even now," said Len Burman, a deputy assistant treasury secretary in the Clinton administration. All the talk about saving money by letting tax cuts expire "represents some sleight of hands."

Moreover, top Democrats want to keep the portion of the Bush tax cuts that goes to the non-rich, an expensive proposition that isn't fully accounted for on what passes for their balance sheet. Liberal economist Robert S. McIntyre says Democrats are taking their cue from John Kerry's campaign in 2004.

"Starting with Kerry, Democrats have taken the position that they can raise money by keeping part of the Bush tax cuts, which makes no sense at all," he said. McIntyre, director of Citizens for Tax Justice, said he hasn't seen an honest campaign budget since Bill Clinton's in 1992. "It had tables that added up."

The tussle over tax cuts for the rich is the most prominent item on a menu of panaceas used by both parties, in a process far removed from how families juggle their own finances.

Republican candidates find shelter in their traditional argument that tax cuts will be paid for in part, in whole or more by resulting economic growth, an inexact proposition at best but one they use to avoid spelling out details of spending cuts or deeper debt.

Candidates claim big savings from making bureaucracies such as the health care system work more efficiently, as if that has not been tried before. Although some methods hold promise in the eyes of experts, it's too early to account for them in the books.

Clinton, for example, proposes to pay for about half of her $110 billion health care plan with the expiring Bush tax cuts and much of the rest with cost-cutting efficiencies such as letting Medicare negotiate for cheaper drugs. In essence, that counts savings that have yet to be negotiated as money coming in.

Obama invokes similar cost savings and the Bush tax cuts in explaining how he'd pay for his $50 billion health care plan and about $80 billion in tax cuts for lower-income families.

He is aggressive in wanting to go after "loopholes" and "tax havens," pain-free euphemisms for raising corporate taxes. His plan requires persuading other countries to cooperate in reining in U.S. tax dodgers abroad, and there's no telling how that would work out.

The health care plans also call in varying degrees for spending money to save even more money, such as by putting more dollars into preventive medicine so fewer people will get expensively sick.

Although politicians in both parties consider that a logical outcome and the right thing to do for people's health, no one can know with precision how big those savings would be or when they would happen.

On the Bush tax cuts for the wealthy, Democrats could achieve real savings by repealing them earlier than scheduled, in 2010, as several want to do. But those would be short-term savings, not the banquet of extra billions needed year to year to help pay for their programs.

Bush's tax cuts were across the board, disproportionately benefiting the wealthy in real dollar terms but not exclusive to them. There is no neat package to be taken off the table.

Edwards, among others, says he would extend the portion of Bush's tax cuts for low- and middle-income people, but he doesn't show the cost of doing so in his tax and spending plans. His campaign assumes Congress will extend that tax relief anyway _ in effect, charging the cost to Capitol Hill.

Burman, as senior fellow at the Urban Institute and director of the Tax Policy Center in a venture with the Brookings Institution, is sympathetic to the direction of Democrats on tax and social policy. But, like McIntyre, he's also a numbers man, and finds their accounting wanting.

"The expiration of the tax cuts is built into the budget baseline already," he said. When Edwards talks about extending them only for the middle-class, "he's not saving any money," but spending it, he said.

Some of the fine print could make a substantial difference in whether only the truly wealthy get dinged. Democrats want to raise taxes on "those" making over $250,000 _ in Edwards' case, over $200,000. What they don't say often is that "those" means a family, not an individual taxpayer.

So how should a responsible candidate present a big spending plan? McIntyre wishes one would say: "This is what I want to do. I don't know how to pay for it yet.

"It's not grand," he went on. "But it's better than saying, 'Here's what I want to do and I have a phony way to pay for it.'"