Bush's Tax gift to the rich
By Fred Gaboury
Although taxes are hardly on the radar screen of voter concerns during this election campaign, they are at the top of the list of George W. Bush’s agenda – and he’s having a hard time explaining his plan. "I’ll have to work on it," he supposedly told reporters recently.
Be that as it may be, we don’t have any trouble explaining it. We say it flat out – the tax plan that George W. is pushing is a give-away to the rich and we point to research done by Citizens for Tax Justice (CTJ) to back up our charge.
According to CTJ, Bush’s plan cuts taxes for people in the lower 20 percent income group – average annual income $8,600 – by an average of $37 while cutting taxes in the top 1 percent income heap – average annual income $915,000 – by an average of $23,331 annually.
Or, put another way, the 20 percent of the population with annual incomes below $13,600 would receive 1.2 percent of the total tax cut while the top 20 percent would get nearly 80 percent. And Bush is even more generous to his buddies in the top 1 percent with incomes above $319,000 who would receive a whopping 36.4 percent of the total cuts. As for the "middle class" – the 40 percent with annual incomes between $24,400 and $64,900 – they would get a little over 16 percent of the cuts.
The tax plan offered by the Democrats differs from the Bush plan in two fundamental ways: It is much smaller – $500 billion as opposed to $1,600 billion and is much better balanced. Under it, families in the bottom 20 percent would get an average cut of $70 – and 4.8 percent of the total – while those in the top 20 percent would see their taxes cut by an average of about $8,400 and get 47 percent of the total cuts.
Although that still violates the principle of a tax system based on the principle of ability to pay, it is much better than Bush’s plan. And, given the options available to the people’s movement at this time, it deserves their whole-hearted support. And that support will be needed in the days and weeks ahead as the battle over tax and spending issues – over who gets and who pays – heats up as Congress and the White House hammer out the budget for Fiscal Year 2001 that begins Oct. 1.
The fundamental issue underlying the question of taxes is that of the size, if any, of the non-Social Security budget surplus, which the Congressional Budget Office says will reach $1.9 trillion over the next 10 years.
Bush & Co. – and to a certain extent, the Democrats – base their approach on the assumption that good times will be with us forever, thus guaranteeing that a budget surplus will be with us for at least as long. But the Center for Budget Policy and Priorities (CBPP) isn’t so sure.
As Robert Greenstein, CBPP president says, policy-makers shouldn’t count the chickens before they hatch.
"Many policy makers and members of the public apparently believe that $1.9 trillion is now available for these purposes," Greenstein, says. "[But] when the cost of maintaining current policies and [levels of] discretionary spending are taken into account, the $1.9 trillion figure is cut in half. Furthermore, a significant portion of the remaining funds will be needed to help restore long-term Social Security and Medicare solvency. As a result, the amount actually available for tax cut and program initiatives may be in the vicinity of $400 billion over 10 years rather than $1.9 trillion."
But that won’t deter Bush or House Budget Chair John Kasich (R-Ohio) who have their minds set on returning the surplus to its "rightful owners" in order to keep "the Democrats from spending it." And here I thought that giving hundreds of billions of dollars to those who already have hundreds of billions of dollars is "spending!"