Politician Warns Against Letting Tax Cuts Expire
GUY RAZ, host:
Now, while David Stockman argues the Bush tax cuts have to go, there's another prominent Republican voice making the opposite argument.
(Soundbite of ad campaign)
Mr. FRED THOMPSON (Host, "The Fred Thompson Show"): Folks, America's economy is struggling, and Congress is about to make it a whole lot worse. Our nation faces a massive, automatic tax increase at the end of this year when the Bush tax cuts expire.
RAZ: That's actor and former Senator Fred Thompson, in a new ad campaign aimed at saving those Bush tax cuts. When I spoke with him this week, he said higher taxes will slow down economic growth.
Mr. THOMPSON: The CBO put out a statement a few days ago that pointed out that the national debt, which is 36 percent GDP - was three years ago, is projected to be 62 percent the end of this year, and rising in the future. Money is on the sidelines; people are concerned about a lot of different things.
One of them, I think, is the uncertainty as far as taxes are concerned. I think that's especially true with small business. The wealthy make a major contribution in terms of investment, in terms of jobs. I think that history shows that revenues to the government correlates to growth - and not to taxes.
RAZ: As you know, Senator Thompson, most economists say you simply cannot cut spending enough to make up for the shortfall because the biggest chunk of federal government spending is mandatory - things like Medicare, Social Security, paying the interest on the national debt. These are fixed costs that the government simply can't do anything about. So how would you close the gap, the deficit gap, by cutting spending and not asking the richest 1 or 2 percent to pay more tax?
Mr. THOMPSON: Well, in the first place, we can do something about mandatory spending. We have to. That, obviously, is the driving force behind the unsustainable fiscal situation that our country has. So we absolutely have to address that. That's where the money is. We're making promises to retirees in the future that we simply cannot keep up with.
But half the people in the country, almost, pay no income taxes at all; and 5 percent of the people pay 60 percent of the income taxes in this country. So I would be satisfied if we kept it kind of within historical norms, like 18 percent of our economy. And I don't think that history bears out the notion that if we will stick it to just a relative handful of people in this country, that it's going to solve our problem.
RAZ: That's former Republican Senator Fred Thompson, from Tennessee.
Fred Thompson, thank you so much.
Mr. THOMPSON: Thank you.
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