Rudy, Reagan, and Taxes

Rudy Giuliani waves the flag of "fiscal conservatism" in an appearance in Des Moines today, linking himself to Ronald Reagan.

The comparison actually is apt. During each of his eight years as mayor, Giuliani increased government spending -- by a whopping 9 percent in his last full budget year -- while cutting $2.5 billion in annual business taxes. Throughout, Giuliani argued that the city government was some bloated beast that was suffocating the private sector. His favorite president similarly increased government spending, largely for defense, while cutting taxes, describing himself as an enemy of Big Government.

Reagan left his successor, George H. W. Bush, with such a depleted budget that Father Bush was forced to violate a campaign pledge and raise taxes. Giuliani left his city hall successor, Michael Bloomberg, with such a huge budget gap, that Bloomberg, too, was forced to raise property taxes -- to his lingering chagrin. Bloomberg, a real-life businessman, never bought into Giuliani's self-serving myths about gross government inefficiency. He saw, instead, a reasonably efficient city government and contended that reducing services would do more than a tax hike to drive away those who wanted to live or work in the city.

Giuliani and his supporters could do far worse than to consider the tax policy of Bill Clinton. By hiking taxes on the top 1 percent of income earners in America against the wishes of some of his political advisers at the time, President Clinton helped bridle the runaway federal budget deficit he'd inherited. This eased the jitters of U.S. investors, arguably setting the stage for the stock market surge and powerful economic growth that followed.

Few politicians took greater political advantage of the prosperity touched off by the Clinton-era tax hike than Giuliani. Now, America's mayor goes around the country speaking, George W. Bush-like, of the wizardry of tax cuts because he figures that's what primary voters need to hear.