Liberals with short memories.

Emptying the Humidor
By David Hogberg
I've often wondered exactly how severe is Congress's case of historical amnesia. In late 2005 we found out that many members of Congress clearly couldn't remember anything previous to 1980, as witnessed by their call for 1970s-type price controls on oil. But last week we learned that Congress's historical amnesia is much worse than anyone feared. Clearly it extends back to as recently as the early 1990s.

Nineteen-ninety was the dreadful year in which President George H.W. Bush abandoned his "Read my lips, no new taxes" pledge to cut a deal with Congressional Democrats to increase taxes. Among the new taxes created by that deal was an excise tax on "luxury items." This "luxury tax" was imposed on goods such as jewelry, furs, and yachts. It was subsequently repealed in 1993 after proving to be nothing short of an economic and policy disaster.

Unfortunately, Congress never bothered to consider that increasing the tax on these items, and thereby increasing the price of those items, might change the behavior of said rich people. (Indeed, many members of Congress stubbornly refuse to ever acknowledge that taxes ever affect behavior.) But said rich people had other ideas. If the price of jewelry, furs, and yachts suddenly increased, then maybe purchasing a winter home in Florida seemed like a much better deal. Or maybe those rich people would take a shopping trip to other parts of the world, where the price of jewelry, furs, and yachts were now much more competitive thanks to the U.S. Congress. Contiued