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As Tax Proposal Grows, So Does Distrust of Clinton : Politics: Clinton was elected with a mandate to raise the taxes of the well-to-do. But with all his plans, he's beginning to look like a taxaholic.

March 28, 1993|Kevin Phillips | Kevin Phillips, publisher of the American Political Report, is the author of "The Politics of Rich and Poor." His most recent book is "Boiling Point: Republicans, Democrats and the Decline of Middle-Class Prosperity" (Random House)

WASHINGTON — Just as some kids become chocoholics, some politicians become taxaholics. Bill Clinton, for one, is starting to look like one--which helps explain his declining job approval, the growing skepticism toward his economic pro gram and the resurging popularity of America's fiscal watchdog, Ross Perot.

Public concern about rising tax burdens is well-founded. The average family must worry that the $300-$400 more a year they're likely to pay in new energy taxes could double or triple if that tax gets established, and enactment of the suggested national sales tax could mean an even bigger nibble.

Meanwhile, upper-middle-class business people and professionals, especially the self-employed, are seeing their late-1980s memories of combined federal and state marginal tax rates of 30%-35% prospectively replaced by 45%-50% rates because of new brackets, self-employment levies and surtaxes. The 1990s are becoming a tax-increase decade.

However, though Congress was busy last week passing budget resolutions that ratify the outlines of the President's economic program, the final congressional decisions on whose taxes will go up and by how much are still months away. Indeed, current polls assert that portions of Clinton's program could be in serious trouble unless he can provide new and convincing answers to an all-important question: How can Washington revitalize the U.S. economy and refurbish the American Dream by raising a slew of federal taxes when the average American family is already paying at record peacetime levels?

And it's not just what's on the table--it's what's on the horizon. No one can remember a previous Administration in which so many possible new taxes were mentioned, whispered or leaked in the weeks before and after the new President's inauguration. This is where the taxaholic tendencies get worrisome.

Besides Clinton's official proposals--his proposed energy-consumption tax, the increased levy on the Social Security income of retirees making more than $32,000, a new top income-tax rate of 36% and a surtax on those earning more than $250,000 a year, as well as removal of the cap on the Medicare self-employment tax--many other fiscal trial balloons have been going up over Washington. These include: a possible value-added tax or national sales tax, a higher gasoline impost, a new tax on employee-health benefits above a certain level, steeper taxes on tobacco, wine, beer and hard liquor and some kind of payroll levy or other assessment to pay for a new national health program.

Tax revolts against revenue tactics in a number of states are further aggravating the electorate's sensitivity to federal pocket-picking. Washington hasn't seen anything like it in generations--and never from a President who campaigned on an essentially opposite promise!

Public discontent is serious. One public opinion poll reports that Clinton has the weakest March job approval of any new President in at least 50 years. Polls show support for Clinton's economic program, once at about 60%, dropping much lower. Some 48%-52% of Americans now support the Clinton proposal while 35%-44% are opposed.

This March slump reflects a growing belief that Clinton's economic package puts too much emphasis on taxes, in general, and on two proposals, in particular. According to the most recent Time/CNN poll, voters still endorse the proposed income-tax increases and surtaxes on the richest 1% of Americans by 4-1. Solid majorities, however, now oppose Clinton's proposed energy tax, as well as the White House plan to increase the tax burden on some Social Security recipients.

Political unrest is growing. On May 1, Texas will hold a special U.S. Senate election for the seat vacated by Treasury Secretary Lloyd Bentsen, and the Democrat filling that seat in the interim, former-Rep. Robert Krueger, sees Clinton's tax package as so unpopular in Texas that he's not supporting it. Whatever happens in this race can only embarrass the White House.

Tax indignation is certainly spreading at the state level. The Republicans have been doing surprisingly well with anti-tax themes in early 1993 special state legislative elections--because at the same time voters are worrying about a Pandora's box of new taxes at the federal level, they are also fearful about the state level. Income-tax increases on the top 1% or 2% have passed in a number of regions without arousing voters, but other new charges and taxes are triggering debate--especially a new surge of state and local taxes on soda pop. Clinton's proposals are starting to look like they're part of a serious new wave of federal-state-local taxes on the average family--a far cry from his 1992 campaign rhetoric.

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