Tax Cuts and War Have Seldom Mixed
In the current situation, the Bush administration argues that a war against Iraq is bound to be short and relatively inexpensive, so there is no risk in cutting taxes.

"The cost of the war will be small," Treasury Secretary John W. Snow told the House Ways and Means Committee this week. "We can afford the war, and we'll put it behind us."

W. Elliot Brownlee, a tax historian at the University of California at Santa Barbara, chuckled when he was told of Mr. Snow's remark. "That's what might have been said at the outset of almost any of the significant wars," Mr. Brownlee said.

For instance, after the attack on Fort Sumter started the Civil War, most experts predicted that the war would last a few months at the most, and President Abraham Lincoln's Treasury secretary, Salmon P. Chase, estimated that the war would cost $320 million.

In fact, the war lasted four bloody years and cost $5 billion, more than 15 times Chase's forecast.

In the early days of the military buildup in Vietnam, Presidents John F. Kennedy and Lyndon B. Johnson also thought they could safely cut taxes and meet military expenditures. Business taxes were cut in 1962, and income taxes were cut across the board in 1964.

But as the United States' commitment in Vietnam grew, budgetary strains mounted.

In in his State of the Union Message in 1967, Johnson asked Congress for a tax increase to keep the budget deficit "within prudent limits and to give our country and our fighting men the help they need in this hour of trial."

Congress balked for a time. But in 1968, a 10 percent surcharge was imposed on individual and corporate income taxes. Under President Richard M. Nixon, taxes were raised again in 1969.

The history of wartime taxes in this country can be found in Professor Brownlee's book "Federal Taxation in America: A Short History" (Woodrow Wilson Center Press and Cambridge University Press, 1996); in "The Great Tax Wars," by Steven R. Weisman (Simon & Schuster, 2002); and in a 2002 Library of Congress report, "Financing Issues and Economic Effects of Past American Wars," by Marc Labonte.…
http://www.nytimes.com/2003/03/09/politics/09TALK.html