David Hierl, libertarian: “So you’re worried that if the estate tax is repealed it will be difficult to reinstate it during the next recession. Previously you have argued that we shouldn’t cut taxes now because the economy is doing too well. Just when would you cut taxes? Never, I suspect. The extortion will continue regardless of which one of these bozos wins.”
☞ A recession could be an excellent time to cut taxes, to stimulate the economy. But not the estate tax — cutting that would be a pretty lame way to put immediate cash in the average consumer’s pocket. I do think the estate tax should be simplified, with the cut-off lifted to $3 million or $5 million, and then adjusted for inflation, so truly just a handful of very fortunate folks would ever have to worry about it.
But, taking you larger point, I think you should also allow for the possibility that people can prosper and thrive even if taxes AREN’T cut. Their after-tax incomes can go up, their assets can grow, their air can grow cleaner, their kids attend better schools — the ultimate test of prosperity isn’t necessarily lower tax rates. (Is it?) There was no income tax at all in 1912. Were most Americans better off then? For that matter, were they better off during the Bush years, when the top bracket was significantly lower?
If we leave the current top rate where it is and limit our tax cuts to lower- and middle-income folks, as the Vice President proposes, we’ll have surpluses in good years that we can use in part to pay down the multi-trillion-dollar debt we piled on the last time tax rates for the rich were slashed.
If we ever did pay down much or all of the National Debt, and did get our schools into great shape, and did secure the future of Medicare, and did revitalize our military, and so on — and STILL we had surpluses — well, then, that could be a great time to slash taxes for the top 1% or 2% or 5% of taxpayers. But we’re not there yet.
So for now, let’s turn at least a largely blind eye to the plight of those who are best off. At least the top bracket, at 39.6%, is shade lower than the 90% rate under Eisenhower and the 70% rate under Kennedy, Johnson, Nixon, Ford and Carter. Let’s have, instead, a tax cut mainly for the low- and middle-income folks, with special incentives to help them with things like day-care, senior care, college tuition, and an incentive to save to supplement Social Security when they retire.
Emmett Redd: “You said, ‘Time estimated that the average middle class American family would get the equivalent of about two cans of Diet Coke a day from Bush’s tax cut.’ Cans of Diet Coke are probably higher where you are, but at $0.50 per can here, that amounts to $365 per year. That is about a 15% reduction in my tax bill, if I am average. (From what TurboTax tells me, I am below.) And 15% is not insignificant. ”
☞ No, it’s not. You might well get this much or more under the Gore plan, depending on your circumstances. Both plans help people in the middle, albeit with different approaches. The stark difference is that the Gore plan, frankly, does nothing for the folks at the top (other than helping to assure their continued prosperity), while the Bush plan, in Time‘s words, “heaps most of its benefits onto wealthy Americans.”
Wealthy Americans — unless they’re gay or have gay kids, or care deeply about a woman’s right to choose or tobacco or guns, or worry about the environment or the gap between rich and poor or the capacity of the President to handle major international crises and make sound decisions in complex matters when his advisors disagree — should vote for Governor Bush.
Quote of the Day
A penny saved may be a penny earned, but it's one boring penny. A penny invested, on the other hand, bounces around. It gets bigger one day, smaller the next. A bit player in the drama of global finance, that penny buys a guy a balcony seat in the theater of macroeconomics.~Susan Stewart
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