Dems play class warfare over taxes

Wednesday, January 15, 2003

"Never in the field of economics have so few been given so much at the expense of so many." -- Sen. Hillary Rodham Clinton, D-N.Y.

"This is the most reckless policy I have seen pursued by a president in my adult life." -- Sen. Kent Conrad, D-N.D.

"To use the need for an immediate economic stimulus as an excuse to enact costly new permanent tax cuts for the wealthy is a cynical and disheartening ploy." -- Sen. Edward Kennedy, D-Mass.

There they go again.

No sooner had President Bush laid out his plan this week to kick the U.S. economy into the fifth gear -- from sluggish to robust growth -- when Democrats sounded their usual class-warfare rhetoric.

They insisted that the $674 billion in tax relief over 10 years the president proposes -- roughly a seventh of which would take effect this year -- is a giveaway to the rich at the expense of middle- and lower-income Americans.

According the White House, the president's plan would actually move several million working-class Americans to the lowest tax bracket of 10 percent as of this year and drop 3 million lower-income Americans from the federal tax rolls altogether.

The president's plan also would provide more than 1 million jobless Americans with "re-employment accounts" of up to $3,000, on which they could draw to pay for child care, job training, transportation, moving cost or other expenses related to finding a job. Those who landed a job before using up all of the money in their accounts would be able to keep the cash.

There would also be a reduction in the number of Americans subject to the alternative minimum tax, which was originally a levy on the wealthiest individuals, but which now applies to more than 2.5 million taxpayers, many of whom are middle class.

Surely the party of Clinton, Conrad and Kennedy does not consider those provisions of the Bush tax-cut plan gifts to the rich.

If the poor, the unemployed and the middle class get tax and other relief, why should the Democrats begrudge more upwardly mobile Americans tax relief? After all, they pay a disproportionate share of the taxes. Indeed, the Democrats use an analysis by the left-leaning Urban-Brookings Institution Tax Policy Center as ammunition against the president's plan, noting that 28.3 percent of the tax cuts he proposes would go to the highest-earning 1 percent of taxpayers.

What they don't acknowledge is that the top 1 percent, those earning more than $313,000 a year, pay 37.4 percent of federal income taxes. Their contributions to the federal treasury allow 50 million lower-income Americans to pay no federal taxes at all. The same goes for the top 10 percent of earners, whom, the Democrats lament would get 59 percent of the Bush tax cut.

Those Americans earning more than $92,114 a year pay 67.3 percent of federal taxes.

So, why is it so "cynical," so "disheartening," in Kennedy's words, to cut those Americans footing most of the nation's tax bill a break by ending the taxation of stock dividends? Why should the government step on an investor's money twice, first by taxing corporate profits, then by taxing the money they send to their shareholders? Just to punish those who invest their money in the stock market such as the 9.8 million seniors receiving dividends who would enjoy an average savings of $936 under the Bush plan.

Meanwhile, the president proposes to move up to this year the across-the-board tax rate reductions that were approved by Congress in 2001 and were scheduled to take place in 2004 and 2006. He also proposes to raise the child-care credit to $1,000 per child from the current $600, a change that was to gradually take place over the decade. And he proposes to accelerate the planned reduction in the marriage penalty.

The bottom line is that the president's plan would provide 92 million Americans an average tax cut of $1,083 in 2003. That includes Americans of all demographics, married and single, with children and without, working and not, younger and older, less and more affluent.

The party of Clinton, Conrad and Kennedy would pit one class of Americans against another; would suggest that some Americans deserve tax relief and others do not.

Well, the American people don't suffer from wallet envy. They don't resent the affluent for their prosperity. That's because most Americans either hope or expect to one day become well off, and they don't want the government taxing away their hard-earned wealth. The Democrats just can't seem to understand such thinking by the mass of taxpaying Americans. That's why they continue to play the class-warfare card.

Joseph Perkins is a columnist for The San Diego Union-Tribune.

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