Rupert Cornwell: Spending cuts and tax increases are a dangerous formula

Out of America: Joseph Stack's suicidal attack on his local tax office highlights the growing anger of ordinary Americans
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The Independent Online

It was, of course, pure coincidence. On the very same day that President Obama set up a special commission to tackle America's debt crisis, a man who believed he had been ruined by the country's tax system flew a single-engine plane into the building in Austin, Texas, that housed the local office of the Internal Revenue Service, the US equivalent of HM Revenue and Customs.

Joseph Stack was not a terrorist, but an ordinary citizen with an outsized grudge, the airborne equivalent of the shooter who runs amok to settle some grievance, real or imagined. Miraculously, given the devastation at the scene, only one other person seems to have been killed, and two more taken to hospital.

By all accounts, Stack seemed a relaxed individual, a keen amateur musician with plenty of friends, who, despite a history of trouble with the IRS, gave little sign of the desperation that would drive him to suicide. But, in a carefully planned sequence of events on Thursday, he set fire to his house in an Austin suburb, drove to a local airport and took off in his Piper aircraft at around 9.40am. Less than 20 minutes later, he crashed it into the seven-storey building where the IRS was a tenant.

In a self-described 3,200 word "rant" that he left at the house, Stack explained how he had been persecuted and victimised by the tax authorities in a system rigged against ordinary guys like him. It was a battle he could not win; violence, he wrote, "not only is the answer, it is the only answer". Finally, came the chilling sign-off. "Well, Mr Big Brother IRS man, let's try something different. Take my pound of flesh and sleep well."

The taxman is never a much-loved figure, least of all in the US, with its vaunted individualism and entrenched suspicion of "big government". Every year, about 200 threat and assault complaints are brought by IRS workers. It doesn't help either that the system works by fear – of the random audit faced each year by roughly one in 120 taxpayers, the financial equivalent of a root canal. Stack's response was extreme and beyond any justification. But his "rant" had elements that strike a chord with many people, in these troubled economic times especially.

He railed against a tyrannical and incomprehensible tax code, but also against a corrupt political class that looked out only for itself and its cronies. The banks and the car industry got bailouts, he said – "when it's time for their gravy train to crash under the weight of their gluttony and overwhelming stupidity, the force of the full federal government has no difficulty coming to their aid within days, if not hours" – while ordinary citizens were shafted.

Sound familiar? It should. Such sentiments, expressed with scarcely less vehemence, are the bread and butter of the Tea Party movement that is now the rage of conservative politics here – anti-government, anti-bailouts and, above all, anti-tax. Indeed, the movement takes its very name from that supreme act of rebellion in Boston harbour in 1773 against an oppressive tax system. In other words, mounting hostility to what many Americans consider high-taxing, big government is part of contemporary politics.

Which brings me to the Obama debt commission. This year's federal budget deficit will exceed $1.3trn (£840bn), roughly 10 per cent of GDP, and the figure won't come down very much over the next decade. Britain's fiscal plight is even worse in proportional terms, of course. But we are psychologically readier than Americans to tolerate tax increases. And Britain is not a superpower with the world's largest economy, its mightiest military and most important reserve currency.

The commission itself is something of a cop-out, after the Senate rejected a bipartisan proposal this month for a Congressional committee whose recommendations to cut the deficit would have the force of law. The Obama version can recommend, but no more – and even to expect it to come up with agreed suggestions is asking a good deal in an election year, when divisions between the two parties have paralysed the legislative process.

Even the president acknowledged as much, fearing that the debt panel was "taking on the impossible". But the alternative is even less palatable: a country drowned in debt, unable to meet its obligations to its citizens, and with a currency shunned by its creditors. Alan Simpson, the former Senator from Wyoming who is the commission's Republican co-chairman, put it best. Unless remedial action is taken, he said, "this country's gonna go to the bow-wows". Right now, Americans are being lied to about the severity of the situation, Simpson went on, and, "if people are really ingesting BS all day long, their grandchildren will be picking grits with the chickens".

The BS in question is that being peddled by Republicans, who maintain that a juicy round of tax cuts is the answer to every economic problem, and by Democrats who insist that America can get by without cutbacks in cherished government benefit programmes ("entitlements", as they are called here) such as Medicare and social security, the equivalent of the state pension in Britain.

Privately, everyone knows what must be done if the deficit is to be brought back to the 2 or 3 per cent level sustainable in the long term: a combination of cuts in entitlements and – wait for it – some form of tax increase. But private admission is one thing; unpopular legislative action to which one's name is attached is quite another. Joseph Stack might have been a tragic one-off. But, as November's mid-term elections will surely prove, rage is in the air.