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Southern
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by Rebecca Knight
"Ideology aside, will these guys ever decide that their job includes solving problems, not just using them?"
-- Paul Krugman, New York Times
Take a look at some of the definitions from American Heritage Dictionary for the word vice: 1. a. An evil, degrading, or immoral practice or habit. b. A serious moral failing. c. Wicked or evil conduct or habits; corruption. 2. a. A slight personal failing; a foible. b. A flaw or imperfection; a defect 3. a. A character representing generalized or particular vice in English morality plays. b. A jester or buffoon.
Those definitions pretty much sum up where American politics stand in these troubling times. Actually, American politics and policies are in a vise grip that seems consumed with vice!
There is little doubt about the motivations of the Bush administration and the Republican Party in general. Every move they make, every action taken, every policy promoted, and every law proposed is self-serving with little regard for what benefits this nation as a whole. Their politics are transparent grasps for power and control. It is not a pretty picture. In fact, it is downright disgusting. Come hell or high water they are determined to have their way with little thought given to long term ramifications.
One would do well to spend a few moments comparing the words of George W. Bush from campaign 2000 to what he is saying and doing now. Caution! It is enough to make your blood boil! It is an astonishing abandonment of promises made, policies advocated, and principles proclaimed on almost every single issue.
Remember Bush said he would be a uniter, not a divider. Remember this man said he would never send our military into action without an exit strategy. Remember this man said he did not believe in nation building. This man promised to take one-half of the budget surpluses and dedicate it to Social Security. This man promised all senior citizens a prescription drug benefit under Medicare. This man stated that he wanted a smaller federal government. This man said he wanted to be the world's peacemaker. And the list goes on.
Many voters swallowed what Bush said hook, line, and sinker. Yes, Gore got more votes, but Bush made it to the White House. It was a less than auspicious beginning for the Bush administration, to say the least. For many, it sounded alarm bells of monumental proportions, but we were powerless to do anything about it. Or were we? We, the people, should have done more. We, the people, are what this country is about. At least that is the principle upon which our democracy is based.
That is the conundrum in which we find ourselves. We, the people, are supposed to have our voices heard. We, the people, are supposed to be represented by those we elect. Yet, more and more we find that our wishes are being ignored. This is the result of hardball politics at its worst. This is what happens when people don't exercise their right to vote. But, more importantly, this is what happens when Americans become so complacent that they don't take the time to understand the issues for themselves, when they believe whatever the politician and the media sends their way without thoughtful contemplation.
Bush has proposed a stimulus bill including a large tax cut primarily aimed at the wealthy. The Republican contention is that this redux of trickle down economics will work to get the economy back on track. Been there, done that. It resulted in massive deficits and national debt. Oh, yeah, it was the fault of the Democratic Congress. Remember Democrats are the party of "tax and spend." Well, ladies and gentlemen, the funny thing about that political ploy is that Republicans controlled the Senate from 1981 until 1987, while Ronald Reagan was in the White House. The Senate Majority Leaders were Howard Baker and Bob Dole. And Reagan had the power of the veto.
No, the RED INK REPUBLICANS loaded the federal budget with massive spending on defense and accumulated gigantic federal debt. They are poised to do it again. They may have their way. One can only hope that no Democrat will vote their approval. But the Democrats, too, find themselves in vice grips sometimes. Or they find themselves muzzled with fear by the Republican/Rovian machinations of the political debate.
The tax cut proposal by the Bush administration is being dissected by any number of organizations, academics, and analysts. Here are a few opinions:
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Thomas Oliphant writes in the Boston Globe: "FOR STARTERS, President Bush did not make a $670 billion tax proposal. Its actual cost over a decade will be more than $930 billion, nearly 90 percent of it coming after this year. The long-term impact of this red ink on the economy will squeeze growth and incomes; the short-term impact will be so puny that the entire mess should be tossed in the trash.
The cost was known to those who worked on the proposal and ignored in the presentation and coverage. The missing costs are a matter of arithmetic, not argument. Slashing revenues will add oceans of red ink to deficits and thus to the national debt, on which interest must be paid."
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Paul Krugman writes in the New York Times: "So instead of a temporary measure, we get a permanent tax cut. The price tag of the overall plan is a whopping $600 billion, yet less than $100 billion will arrive in the first year. The Democratic plan, with an overall price tag of only $136 billion, actually provides more short-run stimulus.
"And instead of helping the needy, the Bush plan is almost ludicrously tilted toward the very, very well off. If you have stocks in a 401(k), your dividends are already tax-sheltered; this proposal gives big breaks only to people who have lots of stock outside their retirement accounts. More than half the benefits would go to people making more than $200,000 per year, a quarter to people making more than $1 million per year. ("Class warfare!" shouted the claque.)
"Even the administration's economists barely pretend that this proposal has anything to do with short-run stimulus. Instead they sell it as the answer to various other problems. (It slices! It dices! It purées!) Above all, it's supposed to end the evil of "double taxation."
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"Robert Greenstein, executive director of the Center on Budget and Policy Priorities, said today that the $674 billion "growth package" unveiled by President Bush "represents a radical departure from past, bipartisan actions to help the economy recover from downturns." Greenstein commented that "the plan is remarkable in a number of respects. It is remarkably inefficient as stimulus, costing $674 billion to inject about $100 billion into the economy in 2003, when the economy is weak; remarkable in its fiscal profligacy, swelling budget deficits for years to come; and remarkably tilted toward those at the pinnacle of the income scale, the very group that gains the most from last year’s tax cut."
"Greenstein noted that "while the plan contains middle-class tax cuts, they are temporary. The middle-class tax cuts simply accelerate tax cuts already enacted. By contrast, the most affluent Americans would receive a lavish new tax cut that is permanent, the elimination of taxes on corporate dividends." He added "over time, middle-class families could be net losers. There is no ‘free lunch,’ and these tax cuts ultimately would have to be paid for, either through higher interest rates and slower economic growth caused by swollen deficits or through budget cuts, most likely in programs for the middle class and the poor."
"He also said that states and working-poor families would likely be immediate losers. States would lose because the dividend tax cut would cost state treasuries $4 billion to $5 billion a year, and the plan contains no offsetting fiscal relief. Working-poor families would lose because they would receive no tax cuts (the plan fails to accelerate the components of last year’s marriage penalty relief and child credit expansion that focus on the working poor), and these families could be adversely affected by deeper state budget cuts and higher interest rates."
EXEMPTING CORPORATE DIVIDENDS FROM INDIVIDUAL INCOME TAXES
"As the centerpiece of its "growth package," the Bush Administration proposes a large reduction in the taxes that individuals pay on dividend payments they receive from corporations. According to Administration estimates, this tax cut reduces revenues by $364 billion, representing more than half of the package’s $674 billion cost through 2013. This proposal to eliminate the taxes on dividends raises a number of major questions, however. It would do little to stimulate the economy in the near term. In addition, its high cost over the next decade and beyond would result in further damage to the federal budget, increasing deficits and thereby reducing national savings and imposing long-term costs on the economy.
"Furthermore, the proposal represents unbalanced tax policy. The proposal’s advocates argue that this tax cut would help the economy by lightening the tax burden on corporate investments and ending the so-called "double taxation" of corporate dividends, which can face taxation at both the corporate and individual levels. But if it is argued that a portion of corporate dividends are taxed twice, it should be acknowledged that large amounts of corporate profits are not even taxed once. In recent years, corporate tax avoidance has increased as firms have engaged in more aggressive strategies to shield income from taxation through tax shelters and other means."
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David Broder writes for the Washington Post: "According to an analysis by the Urban Institute and the Brookings Institution, 64 percent of the $364 billion in benefits from dividend tax elimination would go to the top 5 percent of taxpayers, the same people who are the main beneficiaries of the Bush tax cuts of 2001.
"Over time, eliminating this tax would likely deepen the growing budget deficits. The first round of Bush tax cuts will cost more than $1.3 trillion in revenue over 10 years. This package pushes the costs to the $2 trillion level -- even as the demands of homeland defense, the war on terrorism and a possible attack on Iraq add to spending pressures.
"But none of this is likely to deter Bush. His arguments are flexible, but the policy is constant: Keep cutting taxes from the top down."
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Kevin Phillips writes for the Los Angeles Times: "For those who ever believed in it, Washington "compassionate conservatism" just took off its mask. Federal deficits are soaring. State finances are sinking into their biggest crisis since the Great Depression. So, what does the Bush White House propose?
"No serious help for the states. Nor is there relief from payroll taxes to encourage job creation. Sen. John McCain (R-Ariz.) has rightly remarked on the lack of compassion in the administration's economic stimulus package. Its centerpiece, costing $364 billion of the $674 billion to be spent over 10 years, is to reduce or end taxation of dividends, some 40% of which annually goes to the top 1% of wealthy Americans. What this complicated proposal would stimulate is not the workaday economy but the already huge gap between the wealthiest Americans and everyone else."
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E. J. Dionne writes for the Washington Post: "The president is proposing an economic "stimulus" plan that will certainly stimulate the very wealthiest Americans.
"Its centerpiece will be an end to taxes on dividends, which will cost the government about $300 billion over the next decade. It happens, according to Citizens for Tax Justice, that roughly half that money would go to people earning more than $350,000 a year, to the top 1 percent of Americans. The 80 percent of households earning less than $73,000 a year will get less than 10 percent of this stimulant.
"With so many Americans losing their jobs and their health insurance, with senior citizens getting clobbered by prescription drug costs, with money short for educating kids, you'd think we could find better ways of stimulating the economy."
Now why is it that the Bush administration would think they can put forth such an outrageous proposal? Simply put, because of brazen political power. The Bush/Rovian illogic is that they can do whatever they please because they have the political clout and the Congressional votes to get what they want. They are not the least bit interested in doing what is best for Americans in general, but they are bound and determined to appease their political base composed of the very wealthy and corporate conglomerates.
Oh my! There goes the "class warfare" charge against Democrats. Just who is playing class warfare? It takes two sides to wage a war. If the RED INK REPUBLICANS want to continue to benefit the upper class with tax cuts, are they not waging class warfare against the middle and lower income Americans? Of course they are!
The clamor from the RED INK REPUBLICANS is based upon their contention that it is unfair for the rich to be taxed disproportionately and any Democrat who disagrees with that statement will be labeled with socialist tendencies. The horror! How dare anyone expect the rich to pay more in taxes than the poor or middle class.
Ladies and gentlemen, here is the flaw in their argument. The rich should pay more in taxes not only because they control more of the wealth, but because they also benefit more from government services! Yes, that is a true statement. Think about it. Here is a very illustrative story from MakeThemAccountable.com.
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Subject: The TRUTH about tax cuts
"Let's put tax cuts in terms everyone can understand.
Suppose that every day, ten men go out for dinner. The bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:
The first four men-the poorest-would pay nothing; The fifth would pay $1: The sixth would pay $3; The seventh $7; The eighth $12; The ninth $18. The tenth man -- the richest -- would pay $59.
That's what they decided to do. The ten men ate dinner in the restaurant every day and seemed quite happy with the arrangement -- until one day, the owner threw them a curve.
"Since you are all such good customers," he said, "I'm going to reduce the cost of your daily meal by $20." So now dinner for the ten only cost $80.
In the nasty and brutish universe inhabited by right wingers, the men go on to argue about how much of a reduction each should get, and end up physically beating on the richest man, who then quits coming to dinner.
Fortunately, I live in a different universe. In my universe, the men decide that there are at least a couple of ways to distribute the savings—or even increases in the price of the dinner, for that matter—equitably. Maybe they actually consulted a woman on the matter.
One of the ways to distribute increases or decreases equitably is to use income growth as a measure. The rich man’s income has grown much faster than the others, and in fact the four with the lowest incomes have even experienced a decrease in real income. The richest man has also had the greatest growth in wealth accumulation. After all, the poorest four spend everything they have on food and shelter for their families, the absolute minimum required for human existence, and have nothing left over. The higher the men’s income, the more wealth they can accumulate.
The richest man also realized that he benefits disproportionately from the system. He knew that the entire infrastructure of the country serves him as an individual, and also serves the companies he owns stock in. He realized that he takes advantage of the educational system every time one of those companies hires an employee. He understood that the companies he owns use government administrative functions and courts far beyond the needs of the poor. He may even have seen that his companies aren't paying their way completely. Maybe those companies are polluting, rather than cleaning up their waste. Maybe those companies aren't paying a living wage to all of their employees, causing the need for extra social services provided by the government.
And the richest man realized, once he thought about it, that as smart as he was and as hard as he had worked—damn hard, as a matter of fact—there was still an element of luck in his financial success. A lot of people were as smart as he, or even smarter, and had worked as hard as he, or harder, but hadn't done as well. So if good luck was part of his success, maybe bad luck was part of what made poor people poor. Doesn't he owe something back? Of course he does, and his religion tells him so. I say that with confidence, even though I don’t know what his religion is. I say it because every major religion and moral philosophy demands that we help our neighbor.
This whole exercise taught the richest man that people with the lowest incomes don't pay enough in taxes—because they don’t MAKE enough. He resolved then and there to work with other rich people and employers to increase their incomes. After all, the poor will then be able to buy more products made by his companies, and may even at some point be able to take pride in buying their own dinners. And maybe another benefit of increasing incomes would be less crime, so the richest man could get rid of some of the watchtowers and searchlights protecting his property.
In my universe there was no need to beat up the richest man, or anyone else. There was no need for anyone to quit coming to the restaurant.
As a matter of fact, I'm led to believe that they all lived happily ever after."
Carolyn Kay, www.MakeThemAccountable.com
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And one final point: Does anyone know of a wealthy person who would choose to switch places with someone of a lower income just to avoid paying taxes? Please contact me! I volunteer to exchange my income for a higher one and never open my mouth to complain about tax levels. I would happily pay every cent and whistle in glee as I skip home from the IRS office!
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Rebecca Knight is a native Tennessean, who grew up in Nashville, and currently resides in a small town near Nashville. Ms. Knight's political awareness evolved through the civil rights movement, the Vietnam era, the Watergate era, and the cold war. The debacle of the 2000 election increased her sense of responsibility for political activism. You may contact Rebecca Knight via e-mail at tennessee_gal655@yahoo.com.
© 2002 by Rebecca Knight
