Considering a War Tax
Update: An editorial in today's Washington Post discusses the possibility of increasing the gasoline tax to help pay for the troop increase. The editorial mentions that gas taxes enacted in 1940 and 1951 helped to pay for World War II and the Korean War, respectively. The article points out that the federal gas tax has not been raised since 1983, and that a 40-cent increase over five years could help "cover most or all of the war's costs and still leave gasoline prices well short of where they were in the summer of 2008."
Ahead of President Obama’s expected proposal to increase the number of troops in Afghanistan, House Appropriations Committee chair David Obey has joined several other Democrats in proposing a war surtax.
Obey’s motives probably have a lot more to do with his opposition to a troop surge than his fear of borrowing. But that doesn’t mean a proposal to pay for the costs shouldn’t merit consideration. If we are going to engage in more spending, regardless of what kind, it should be paid for. The current debt picture should make those trade-offs painfully clear.
President Obama is expected to propose a 20,000 to 40,000 troop increase. The White House estimates each additional troop would cost roughly $1 million per year (although the Pentagon estimates closer to $500,000), and that the total cost of a troop increase would be between $20 billion and $35 billion per year. This is on top of the $55 billion a year we are already spending on Afghanistan (and related activities), and the addition $100 billion we are spending in Iraq.
The Share the Sacrifice Act of 2010 would impose a three-bracket surtax, set at “applicable tax rates” necessary to fully-finance expenditures related to the war in Afghanistan. Certain taxpayers – in particular members of the military and their families – would be exempt.
It would be reasonable for these offsets to occur either as a tax increase, or as a spending cut; and given the amount of waste in the defense budget, there is plenty of room for spending cuts.
But at the end of the day, we can’t pretend that certain measures – even important measures – are free.
Congressman Obey had it right when he declared that “if this war is important enough to engage in the long term, it's important enough to pay for.”