Friday, May 16, 2003

Bush Tax Cuts a Fool’s Errand

Is it me, or does anyone else find this constant push for a tax cut a bit wearying, not to mention overwhelmingly foolish? Don’t we have a war to pay for? Aren’t the vast majority of states running in the red? Aren’t there millions of Americans without basic healthcare, and still more unemployed? Is this really the best time to cut the government’s revenue stream?

Looking at my latest pay stub, I would be the first one to stand up and proclaim that I need tax relief, but then sobering reality would slap me in the face like the recent westerly winds hammered my newly built gazebo this past weekend. I, like the rest of my fellow sober, rational thinking, forward-looking, multi-dimensional Americans, must look at the larger picture. And that picture is fuzzy, its colors are starting to run, and fade. But it nonetheless illustrates an undeniable truth: we cannot afford tax relief, not now, nor anywhere in the distant future.

The President claims that the tax relief package—which seeks to significantly cut the dividend tax—will create new jobs, especially new small business jobs. Please, there are not enough small business jobs in America to employee the millions of people who have lost their jobs, let alone replace the income that has left the economy. When held up to the mirror of reality, the Presidents tax cuts are nothing more then a gift to the richest 1 percent of Americans; a thank you card from the President at our (the rest of the 99 percent of Americans) expense.

Consider the numbers: according to the Urban-Brookings Tax Policy Center, under the President’s original tax relief plan, households with $40,000 to $50,000 in net (taxable) income would receive an average tax cut of $482 and an increase of 1.2 percent to their total after-tax income. For households earning more than $1 million, the average tax cut would be more than $89,500, with an increase in their after-tax income of 4.2 percent.

The $550 billion version of the President’s plan that passed the House of Representatives last week is even more generous to the rich. Those same middle-income households would receive a tax cut of $452 and an income boost of 1.1 percent, while the nation’s upper crust (those making over 1 million dollars) would receive a tax-cut of $93,537, enough to enlarge their after-tax income by 4.4 percent. The more unpretentious $350 billion tax cut that passed the Senate Finance Committee last week would trim the average millionaire's tax cut a smidgen, to $64,431. But it would also trim the middle class tax-cut to $415.

The 10-year, $1.35 trillion tax cut that passed in 2001, and gave us all $600 to spend, also gave the uber-rich a windfall, but it left the relative income tax burden of each income group largely untouched. That is because most of the cuts targeted income, and taxpayers at every income level received virtually the same percentage reduction. In contrast, the centerpiece of the Republican White House and Republican House tax plans—sharp cuts in taxes paid on dividends and capital gains—are aimed at investors, who tend to be very wealthy.

I, like most Americans, do not have large sums of money tied up in individual stocks. If we invest in the Market, our money is more than likely in mutual funds, 401(k)’s, CD’s and IRA’s. Therefore the benefit of the current round of tax-cuts for the vast majority of Americans would be negligible, unless of course you count the job creation angle. Just how does a cut in the dividend tax rate morph into a new job with health care benefits anyway?

This is not leadership; this is cronyism at its unabashed, unadorned, repugnant worst. And it only reinforces my belief that taken as a whole, the Republican Party has no political or social philosophy in which I feel comfortable supporting. The Bush tax cut proposal is a fool’s errand trumpeted by a Party that cares only for the rich conservative few that keep its coffers full, and its agenda at the center of American life, whether we like it or not. The tax-cut proposal is bad for America. At a time when we need bold leadership to see the country through the worst economic and fiscal malady since the end of WWII, we have Bush. Is it just me, or is anyone else looking for a safe place to hide for the next six years?

Source: Jonathan Weisman, Washington Post Online. Bush Blunts 'Fairness Question' on Taxes

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