In any case, the siren song of vanishing deficits does not play as sweetly in all corners of the conservative camp. Grover Norquist, president of Americans for Tax Reform, for example, boasts that coming deficits will force the dismantling of most of the federal domain. "The goal is reducing the size and scope of government over time by draining its lifeblood," Norquist told U.S. News recently. To allay any fears that the Boskin effect will shrink the deficit so much that it will lack the weight needed for the budget-squeezing task, Norquist might consult a recent Fortune article. It warns that "Washington will soon be taking back a good chunk of that new tax cut . . . by using the sneakiest trap it's got: the alternative minimum tax."
The AMT is a provision of the tax code meant to keep high-income taxpayers from using shelters and deductions to avoid paying taxes. But because it, unlike other parts of the code, is not indexed for inflation, more and more people--as many as 33 million taxpayers by 2010, according to Burman and Gale--will be subject to the AMT and paying higher taxes than promised by the recent tax cuts. No doubt Congress will want to fix that. But here's the catch: Repealing the AMT would cost nearly $1 trillion in the first decade and more thereafter.
So what lies ahead on the fiscal path? No problem? Big problem? I'd guess the latter. And if that worries you, with tax hikes being verboten, then it's time to turn attention to the untidy business of chucking out government programs. But that's an exercise for another day.