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   Idiotic Proposed Tax Cuts Show Who's Really Getting Welfare


Idiotic Proposed Tax Cuts Show Who’s Really Getting Welfare

The “Growth Package” that George W. Bush has put before Congress is stunning in its flagrant favoring of the wealthy. At a time of national recession, if not depression, we have a “leader” who is dreadfully out of touch with what is happening to the less-than-wealthy people in this country.

Our states are facing massive shortfalls in meeting increasingly desperate social welfare needs; they need more help from the federal government, not less, but they’re much less likely to get it when the Bush administration, and unfortunately probably Congress, are intent on “freeing up” money for the rich so they can spend it to “stimulate the economy.”

Hell’s bells! Rich people don’t spend money willy-nilly. They invest it, or put it in offshore trusts, or just park it in banks. If Bush really wanted to stimulate the economy, he’d cut taxes and increase the Earned Income Tax Credit. Then he could be sure every last cent got recycled into the economy immediately.

Making dividend income tax-free is quite a boon—if you own stocks that pay dividends. Hey—dividends are income you get without having to get your hands dirty. Why should you get it tax-free? It’s like “found money.” Maybe if this tax-free status were limited to, say, the first $1,000 of dividend income there would be some semblance of balance and thoughtfulness to the proposal. But all dividend income? Why not just make EARNED income not subject to taxes, and tax all other income? Wouldn’t that be the most fair way to do things?

Alas, “fair” is not a word in George W. Bush’s vocabulary. Nor is “prudence.” His “tax cuts” are chewing away at future revenues, 10 years down the road.

And then there's the "acceleration of the reduction in marriage penalty." Now, there's a red herring. There is no "marriage penalty" except in relatively rare cases where both spouses earn about the same substantial gross income. Using the "marriage penalty calculator," readers can quickly assess the tax impact of two spouses' TAXABLE--not "gross" or "adjusted gross"--incomes. Try assigning a $100,000 taxable income to one spouse, and zero income to the other; you'll see a nice fat 'tax bonus.of $3258 for the couple. But if both spouses have taxable incomes of $50,000 apiece, they get a 'tax penalty'of $1155. This and other oddities show the latest rendition of the tax code has some really sweet deals for 'traditional' couples where one spouse doesn't work or has a 'fun" job while disfavoring couples who have substantial similar gross incomes--say, $80,000 gross apiece. (Curious-Somehow the folks who flog this issue never mention that there's such a thing as a Marriage Tax Bonus--received by more couples than "penalties.)"

All this aside, any savvy wealthy person knows how to legally avoid paying taxes through various accounting maneuvers. The end result, as always, will be that the weight of the government will be carried on the backs of many, many “little people.”

Some would wail that a bigger chunk of tax money comes from the wealthy few than from the multitudes, we would remind them that EVERY AMERICAN PAYS THE SAME TAX RATE at each income level. That 10% rate for the poor is likewise a kissoff for the wealthy, as their first increment of income will also be taxed at that low rate. The higher rates kick in only at the higher levels of taxable income. Everybody is treated the same each step of the way.

Tax cuts? When we’re spending wildly to prepare for an obscene pre-emptive war? When our nation’s needs are growing exponentially in the face of massive layoffs, decaying infrastructure, failing schools, and so on?

Somebody please pinch us awake. We must be having a nightmare.

Copyright © 2003 The Baltimore Chronicle and The Sentinel. All rights reserved. We invite your comments, criticisms and suggestions.

Republication or redistribution of Baltimore Chronicle and Sentinel content is expressly prohibited without their prior written consent.

This story was published on January 8, 2003.
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