Little Goodies 

The president's tax-cut plan is economic folly.

I just love the fine print in the president's tax-cut plan. I grant you, the overall effect is pretty spectacular too -- a plan that has almost no stimulative effect but still opens a future of zillion-dollar deficits to drag down the economy. That's the backasswards of what we need, but it's not the fun part.

Look at these little goodies:

• Think because you have money in the stock market you might have a stake in eliminating the dividend tax, the centerpiece of the president's tax cut -- $300 billion over 10 years? You probably think you have money in the stock market because your 401(k) keeps going down -- that would be 40 million Americans. But no! This tax break doesn't apply to your dividends! The money in your 401(k) from both savings and dividends are tax-sheltered until you withdraw the money -- then all of it gets taxed as ordinary income. You don't get any tax break on your dividends -- that only goes to the investor class.

According to Kevin Phillips, 1 percent of investors pocketed 42 percent of the stock-market gains between 1989 and 1997, while the top 10 percent of the population took 86 percent. These people need a tax cut! They haven't been getting their share!

• According to the Urban-Brookings Tax Policy Center, the effect of eliminating dividend taxation is that the average benefit for those making less than $10,000 would be $6 and the average benefit for those making more than $1 million would be $45,098.

• Bush also wants to accelerate the income-tax cuts slated for 2006. Look at this folly: The top 5 percent of taxpayers would get 70 percent of the benefits on that one. The bottom 80 percent would get 6.5 percent of the benefits. Ditto with accelerating the 2004 tax cuts: 64.4 percent to the top 5 percent of taxpayers; 7.7 percent to the bottom 80 percent.

• One of those people who can't handle numbers? Need something visual to work with? Find the Urban-Brookings charts published in the January 7th New York Times showing who gets how much of this tax cut. You can barely see the lines that measure the relief until you get above the 99th percentile.

The only good part of Bush's tax-cut plan is the $400 increase in the tax credit per child. Naturally, that's the one part of the plan right-wingers hate.

As we all wade into these numerical battles over exactly how much of this tax cut goes to the very rich, the more fundamental question is whether it's a good idea, economically or in terms of social justice, to have the very rich get very much richer than they already are.

Contrary to the paranoid fantasists on The Wall Street Journal's editorial page, populists are not motivated by some burning resentment of the rich. We don't spend our lives in an envious funk that someone else is better off than we are. Less than 0.1 percent of the U.S. population gave 83 percent of all itemized campaign contributions for the 2002 elections, according to the Center for Responsive Politics.

How dumb do you have to be not to be able to connect the dots here? Law, policy, and regulation are consistently shaped to favor the rich over the rest of us, and that, dammit, is not fair, it is not right, it is not the country we want and for which we are asked to sacrifice.

Molly Ivins writes for Creators Syndicate and the Fort Worth Star-Telegram.

Comments

Subscribe to this thread:

Add a comment

ADVERTISEMENT
ADVERTISEMENT
    • Southern Democrats: Down, Not Dead

      Recent published obituaries to the contrary, the Democratic Party in the South is live and kicking, and can still rise again.
    • Dividing by Zero

      Why the Fairgrounds and Graceland Hotel Projects fail common sense.
    • The Raging Bull in D.C.

      Senator Mitch McConnell’s sinister immigration irony.

Blogs

Tiger Blue

Tigers 83, USC Upstate 73

Hungry Memphis

Raw Girls Launches Food Truck

News Blog

Candidates Sought For Council Vacancy

Calling the Bluff

Don Trip is a "Man on the Moon"

News Blog

Riverside Drive Bike Lane Named In Top 10 List

News Blog

Memphis' Logan Guleff Wins MasterChef Junior

Calling the Bluff

Starlito Connects with Don Trip, Yo Gotti for New Track

News Blog

Pension Reform Gets Council Approval

Beyond the Arc

Next Day Notes: Grizzlies 105, Warriors 98

ADVERTISEMENT

More by Molly Ivins

ADVERTISEMENT
© 1996-2014

Contemporary Media
460 Tennessee Street, 2nd Floor | Memphis, TN 38103
Visit our other sites: Memphis Magazine | Memphis Parent | Memphis Business Quarterly
Powered by Foundation