Bush and Clinton: a Study Of Their Past Tax Hikes

WHEN George Bush reneged on his 1988 pledge and agreed to raise taxes as part of the 1990 budget compromise, he supplied his critics with plenty of ammunition for future attacks.

The most damaging words of this presidential campaign are 1988's "Read my lips, no new taxes," says Republican pollster and political analyst Richard Wirthlin. Today, as Bush calls for an across-the-board tax cut and again promises not to raise taxes, detractors point to his record.

Bush called the 1990 budget agreement with Congress "essential." The nonpartisan Tax Foundation says the bill Bush signed "will raise over $125 billion in revenues by 1994 and currently ranks as the second-largest tax increase in history."

While Bush apologized for deviating once from his nontax route, data from Congress's Joint Committee on Taxation and the House Ways and Means Committee show Bush has actually signed tax bills in 1989, 1990, and 1991 to raise $164 billion over five years. The measures range from excise taxes on cigarettes to higher taxes on corporate profits.

Throughout the president's term, capital-gains tax cuts have been the cornerstone of his economic growth proposals, and of the 1992 fight for tax breaks designed to establish and nurture enterprise zones. Housing and Urban Development Secretary Jack Kemp's plan to create 150 zones throughout the nation, with an estimated cost of $2.5 billion over five years, has failed to win congressional approval.

The president has managed to pass $35 billion in tax cuts from 1989 to 1991, including extending the low-income housing credit and energy-production incentives to boost current oil output and other energy exploration.

In March, Bush vetoed a bill that included six of his seven recovery proposals, including a capital-gains tax cut and investment credits, because the bill had higher taxes on the rich and an unacceptable capital-gains cut.

Just last week, Bush signed into law an energy bill that calls for a $5 billion tax increase in the next five years. The tax hikes, ranging from requiring coal companies to finance retired miners' health care to cutting worker-subsidized parking allowances, are designed to offset the bill's energy production incentives.

In what has been reported as a presidential advertising first, the Bush campaign has been attacking Governor Clinton's Arkansas record through chain mail. "Help us to tell the truth about Bill Clinton's failed record after 12 years as governor of Arkansas by getting this information out to at least 10 of your colleagues and asking them to do the same,..." says a letter now faxed to business executives.

The Republican refrain that Clinton raised taxes in his state 128 times leads the campaign's charge. For the record, Arkansas' own Department of Finance and Administration found that the number is off by one. That is, Clinton raised taxes and imposed or hiked user fees 127 times to draw revenue for a host of state spending programs, including improvements to public schools (with higher sales taxes) and transportation projects (with a gasoline tax).

ARKANSAS Times political columnist John Brummett, whose razor-sharp analysis of the governor's performance hides his support for Clinton's candidacy, says that the governor "certainly can't provide a fully honest perspective about taxation." Mr. Brummett contests Clinton's claim, for example, that Arkansas has the country's second-lowest tax burden.

Clinton is lumping together both state and local taxes, he says, and failing to account for the artificially depressed, constitutionally restricted local property taxes that are "based on historically undervalued real and personal property."

Brummett also charges Clinton "can't tell the whole truth by acknowledging that of the taxes within his reach as governor of the state, Arkansas' tax burden has jumped up to anywhere from 25th to 18th, depending on the source of the research."

But during the 1980s and through the present, states have had to scramble to make up for lost federal aid and their local and state-imposed revenue-raising measures have been pushed by federal officials. Arkansas, like other states, operates under the constraints of legal mandates to balance its budget every year.

John Pagan, a young Arkansas state senator who opposes taxes on food and calls Clinton's taxes on used cars and the nickel-a-gallon tax on gasoline "very regressive," says that the constitutional limits on raising income taxes (it takes a three-quarter vote in Arkansas' legislature) often forced him to fight for revenue increases he could win.