I learned the other day that the vaunted filibuster – that can derail just about anything in the Senate – can’t derail the budget, which includes Bush’s proposed tax cut. It’s scary, because I had always assumed that if all else failed, there was always the filibuster.
The $1.6 trillion Bush plan, which is closer to $2.6 trillion if you look at it realistically, is, I have argued here several times before, dangerously large and, to my mind, blatantly unfair.
Well, check this out. It is excerpted liberally from Matthew Miller’s March 12 column (no one ever accused me of being ahead of the curve):
For weeks [Treasury Secretary Paul] O’Neill has been bellyaching about what he claimed were bogus analyses that showed how dramatically the Bush plan favors upper-income Americans – to which the fair reply of critics has been, ‘then issue your own ‘distribution tables.”
Indeed, the respected career civil servants at Treasury have routinely issued such reports, comparing the impact of proposed tax changes on people in different income groups. The only mystery this year was why that hadn’t yet happened.
Well, the other day O’Neill put out Treasury’s assessment, and now we know why it took so long. There must have been one helluva internal fight to get career officials to scrap their normal rules for doing such analyses in favor of a rigged methodology cooked up to make Bush’s plan look fairer.
For starters, unlike Treasury’s previous standard practice, O’Neill’s analysis deals with only part of Bush’s plan: the income tax cut. It ignores entirely the proposed estate tax repeal and corporate tax changes that amount to hundreds of billions of dollars – and which disproportionately benefit top earners.
Next, the new Treasury report compares the size of the income tax cut people will get only to the amount of income taxes they currently pay; the old standard method showed how an income tax change affected a person’s overall federal tax burden.
Take a modest-earning family that pays only $100 in income tax but $3,000 in payroll taxes. When this family is taken off the income tax rolls by the Bush plan, O’Neill scores it as a ‘100-percent tax cut.’ Previous Treasury reports would have rightly scored it as a 3-percent cut in the family’s overall federal tax burden.
Trust me, there’s more of this flimflam – the worst of which may be O’Neill’s refusal to show the actual number of dollars in tax relief people at each income level stand to receive (which gives rise to accurate claims that Bush is offering the rich a Lexus and poor workers a muffler).
While such duplicity is as normal in politics as in real estate, there are moral distinctions to be made even among frauds. When Democrats lie about Medicare, they rationalize it by telling themselves they’re doing it to win the power to make sure that Medicare is reformed on terms more favorable to the sickest, frailest seniors.
When Bush and O’Neill lie about their tax plan, they’re doing it purely to convince the nation they’re New Age antipoverty warriors when their plan mostly makes America’s top-earners better off.
I don’t know about you, but to me the Bush charade has the edge when it comes to cynicism and immorality.
The GOP plainly believes that if Americans know the full truth about who benefits from Bush’s tax plan, they’ll reject it.
Granted, Matt’s $100 / $3,000 example is extreme, to make the case. But the case is clear nonetheless. It’s hard to get average folks to favor a plan so heavily skewed to the top 1%. You can see why rich oil company executives would favor it. But why would the rest of the country be keen to risk a massive tax cut for the rich?
The Republican challenge, in effect, is to have the American people take this survey . . .
Please rank this list of alternatives in terms of priority:
1. Spend money to strengthen our national defense.
2. Provide cash assistance to help build new schools, renovate dilapidated ones, and hire more teachers to shrink class sizes.
3. Pay down the national debt, to keep interest rates low, the dollar strong, and prices low.
4. Provide meaningful tax relief for typical American households.
5. Beef up basic scientific research.
6. Provide incentives to encourage the development of environmentally friendly alternative energy that cuts our dependence on foreign oil.
7. Add a prescription drug benefit to Medicare for America’s seniors.
8. Provide massive tax relief to the 1% or 2% wealthiest households in America.
9. Continue funding for the 100,000 community police Uncle Sam has been subsidizing.
10. Continue and expand programs like Americorps, the national service program that has brought more than 200,000 young Americans of diverse backgrounds together to work in local community service projects.
. . . and get them to pick #8 as their first priority, largely crowding out all the rest. How do you get the American people to do that?
Well, Matt Miller’s column gives at least some of the answer.
Quote of the Day
That I'm their competition.~Famed hedge fund manager Michael Steinhardt, when asked the most important thing an investor could learn from him.
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