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Jan. 14, 2003
Bush's fuzzy math
The new Bush economic stimulus plan is full of tax breaks for the wealthy, deep deficits for the future, and ignorance of the real needy of this country.
Bush said that, along with his tax cut he will be “fulfilling key obligations." Those obligations must be his obligation to the wealthy and the big businesses of the U.S. He has clearly ignored the real, working class people of this country. According to the Urban Institute and the Brookings Institution, the top 1% of earners would get 28% of the benefit from the plan and the top 10% would get 59% of the tax breaks. And the people who really need the help during this time of economic strife would get (drum roll please) 8% of the total benefit.
Another line that Bush used in his speech was “We will not rest until every business has a chance to grow, and every person who wants to find work can find a job." Well then he must mean just white people because his plan has nothing in store for African Americans whose unemployment rate is double that of the nation. One of the key parts of Bush’s plan is to get rid of the tax on dividends (the funds companies pay out to stockholders). According to the Democratic National Committee this would cost $300 million over a 10-year period and would go to large stockholders (aka. the wealthy) and there is nothing in the plan that says “oh and tax relief and help for the thousands living in poverty in this country."
Democrats, even the ones who voted for the first Bush tax cut, are strongly opposing this plan. There are also some Republicans who oppose the tax cut including John McCain of Arizona and Lincoln D. Chafee of Rhode Island.
According to the Washington Post, Bush said, "Our country has made great progress in restoring investor confidence and putting the recession behind us." He went on to say "we cannot be satisfied, however, until every corporate wrongdoer is held to account, and every part of our economy is strong." I think Bush is mistaken because in my opinion if every corporate wrongdoer were prosecuted then he and half his cabinet would be in jail.
The President’s in-your-face approach has been fairly effective in this country thus far, as proven by Bush's high approval ratings. People need to wake up and smell the crisp green bills that will soon be entering Bush and Cheney’s wallets. According to the Democratic National Committee, Bush would save $16, 511 from the tax scheme and Cheney would save $104,823. Fuzzy math? I think so.
Bush said that, along with his tax cut he will be “fulfilling key obligations." Those obligations must be his obligation to the wealthy and the big businesses of the U.S. He has clearly ignored the real, working class people of this country. According to the Urban Institute and the Brookings Institution, the top 1% of earners would get 28% of the benefit from the plan and the top 10% would get 59% of the tax breaks. And the people who really need the help during this time of economic strife would get (drum roll please) 8% of the total benefit.
Another line that Bush used in his speech was “We will not rest until every business has a chance to grow, and every person who wants to find work can find a job." Well then he must mean just white people because his plan has nothing in store for African Americans whose unemployment rate is double that of the nation. One of the key parts of Bush’s plan is to get rid of the tax on dividends (the funds companies pay out to stockholders). According to the Democratic National Committee this would cost $300 million over a 10-year period and would go to large stockholders (aka. the wealthy) and there is nothing in the plan that says “oh and tax relief and help for the thousands living in poverty in this country."
Democrats, even the ones who voted for the first Bush tax cut, are strongly opposing this plan. There are also some Republicans who oppose the tax cut including John McCain of Arizona and Lincoln D. Chafee of Rhode Island.
According to the Washington Post, Bush said, "Our country has made great progress in restoring investor confidence and putting the recession behind us." He went on to say "we cannot be satisfied, however, until every corporate wrongdoer is held to account, and every part of our economy is strong." I think Bush is mistaken because in my opinion if every corporate wrongdoer were prosecuted then he and half his cabinet would be in jail.
The President’s in-your-face approach has been fairly effective in this country thus far, as proven by Bush's high approval ratings. People need to wake up and smell the crisp green bills that will soon be entering Bush and Cheney’s wallets. According to the Democratic National Committee, Bush would save $16, 511 from the tax scheme and Cheney would save $104,823. Fuzzy math? I think so.
Discuss this Article
P.S. Perhaps if you are writing an opinion article you should know some more facts: such as what the entity that you are criticizing actually entails.
Looks like you already changed to" eliminate tax on dividends."
Please allow me to read non timely stories before you post them.
Davis- I'll start being impressed with percentages when I can start paying my bills with them. What counts is cash. The fact is that more money will go to rich people than to poor people under this plan. We all should worry about the increasing gap between the rich and the rest of us. United we stand, otherwise...
First of all, he has already sent the budget into a deficit with his PRIOR tax cuts. (And it was his tax cuts that caused the deficit to explode, NOT the slowing economy. My source? The nonpartisan, highly regarded Congressional Budget Office.)
Second, if we are on a virtual war-time footing, now is the time to ask those Americans who can afford it to make sacrifices -- not to give them new tax breaks.
Third, his plan will NOT stimulate the economy.
Fourth, his proposal to make corporate dividends tax-free will make state and municipal bonds less attractive than they are now (currently they are advantaged by being tax exempt) -- this will raise borrowing costs for every state, county, and city in the nation.
Fifth, making dividends tax free will give rise to a whole new generation of sleezy tax shelters, as tax lawyers and accountants come up with all sorts of clever ways to convert "ordinary income" (which is taxable) into "dividend income" (which would not be taxable).
People, wise up.
The sad thing is that the rampart greed of the right-wing ideologues who seem to be in control of this Adminstration will in the long run (actually, in the not-so-long-run) do more HARM than good to our free-enterprise system and our society.
"First, I will blatantly remind you that 92 million Americans will get $1,084 dollars"
I wouldn't be surprised, however, that that figure is a warped average. Something like 10 million Americans getting $100,000 and 82 million Americans getting $200.
First you said the tax cut cause deficits not the economy. If you remeber the was a project surplus of 1.5 trillion dollars or something that didn't materilze because of the economy. Also unless you went to an alternet universe where their wasn't a tax cut we can say that buy not cutting taxes the economy would worse off that would in turn lower revenue and increase the deficit.
Second if you think people should make sacrifices make sure to send back your tax cut.
Third what the heck are you smoking? Acording to any economic thinking any tax cut will allways stimulate the economy
Fourth well that is true but so what would you rather have a depersion but still have the low state borrowing rates.
Fifth you aren't really correct their these tax loopholes do exist but you have no evidence that their is any way to make regualr income "dividend income."
My simple analysis of the plan shows several things. Look at the historical trends. Reagan cut taxes which in many ways screwed up the economy for many years and but the government in huge debt. He was wildly succesful, reelected easily and would have won a third term if laws allowed.
Bush Sr decided to "fix" the economy by raising taxes and relieving some of the deficit. He lost to Clinton.
As far as I can tell Bush has looked at this trend and seen that: tax cuts = popularity = reelection. responsible economics = rich/middle class hate you = lose elections.
Note that despite his tax cuts Bush is still advocating the possibility of 2 wars simultaneously and that there are many costly programs he'd like to introduce. Where does he imagine this money will come from? He's cut just about everything he can cut before all of us have to move out of Blair because of budget cuts.
Bush is mostly in this for the political power it will give him, along with profitting for the rich, a class whom he and his cronies are members.
bush gets 44,000 from his cut.
cheney: 327,000
Hmm... you really think poor people are most likely to "save" money? When they are struggling to meet living expenses? At the same time they are paying off debts, as you even said yourself? Rethink your logic.
As last year's wave of corporate scandals reminded us, the leaders of corporations are interest in making tens of millions of dollars. And don't think Enron or the year 2002 were anomolies; this is what the Republican-beloved corporations DO. Especially when regulations and oversights are lifted.
"Also gusse who is in the top 50% thoses that pay over 96% of the taxes? It's anybody who earns more than $26,000 anually. That probbally alot of the people here. So rember that when you here tax cut for the rich rember you are the rich."
See, Harry, I have this thing called _selflessness_ and _interest in the greater good_. You might call it DECENCY, or SYMPATHY for those less fortunate than myself.
And I have this thing called PATRIOTISM which says that when the federal and state budgets are facing huge deficits, the War on Terrorism is costing huge bucks, and money is still short for crucial causes like education, I will DO MY PART AS A GOOD CITIZEN and HELP SUPPORT THE GOVERNMENT.
See, the Democrats are always accused of "class warfare". I got news for you: fighting for sound economic policy isn't class warfare. Handing billions of dollars to rich constituents at the expense of the needy and the government's own financial well-being? Now that's class warfare.
Harry said:
"First you said the tax cut cause deficits not the economy. If you remeber the was a project surplus of 1.5 trillion dollars or something that didn't materilze because of the economy. Also unless you went to an alternet universe where their wasn't a tax cut we can say that buy not cutting taxes the economy would worse off that would in turn lower revenue and increase the deficit. "
Here's what I think. We should not have passed a 1.3 trillion dollar tax cut on the assumption that we would be taking in huge surpluses for the next four/ten years. Maybe that was shortsighted. Maybe we should have held on to a surplus, yknow, and stop the skyrocketing national debt. We could have braced for "unforseen emergencies", like... the dot-com bust, or... September the 11th.
And Reaganomics does not work. You do _not_ increase government revenue by cutting taxes to stimulate the economy. There may be other reasons to cut taxes and/or stimulate the economy, but don't claim it actually makes more money.
I mean, if cutting taxes is so great all of the time, why don't we just abolish taxes altogether? It would stimulate the economy, right? I'm surprised they haven't tried this already.... Why shouldn't the government be a piggy bank for big corporations to draw money from?
It all reminds me of a political cartoon, with President Bush on Jeopardy.
Alex Trebek: "The best course of action during a strong economy."
Bush: "What is tax cuts."
Trebek: "The best course of action during a struggling economy."
Bush: "What is tax cuts."
[and so on...]
"Touche"
Well done.
Could you tell us more about the lives your ten men live? What kind of cars do they drive, where do they vacation, where do their kids go to school. what kind of houses do they live in?
I suppose you assume that no. 10 made all of his money totally through his own efforts. Consider if no. 10 could have become so rich in any other country in the world.
By the way. I just heard that the part about no. 10 getting beat up is not true. In fact what really happened is this: Even though no. 10 was richer than anyone in history could imagine he resented the others because he had to pay so much. So no. 10 moved to a gated comunity so he never had to see the others again. Despite the heavy tax burden he carried, he still had plenty of extra cash so he bought some politicians and some newspapers and lots of radio stations. Then he used these resources to plant the story that the others had beat him up. Stunned needs to check his sources more carefully next time. I just saw no. 10 the other day being driven to the airport where he was going to take his private jet to vacation in Rio until it warms up around here. It was hard to see him through the tinted glass and all, but I could tell that there wasn't a mark on him. He was lookin' good.
However, here's where your analogy falls apart. In the story, the owner reduces each person's payment proportionally. So the 10th man received a tax cut proportional to the amount he was already paying. But more often than not under the Republican plans, the rich receive a _more_ than proportional tax break.
The only people who will benifit from no taxes on dividends are people with thousands of dollars of stock, i.e. the rich.
By the way, here's a counter-argument to the claim that it's unfair to tax the dividends "twice" (once when the corporation earns the profits and again when the stock-owner receives the dividends).
Let's say Joe is a construction worker. He wakes up at 5:30 AM and spends eight hours out in the hot sun doing heavy manual labor. Joe makes $30,000 a year.
Let's say Frank is a lawyer for a private lawfirm. He owns $500,000 worth of stock in a company that pays dividends. The company pays him $30,000 a year in dividends.
The Bush administration would have me believe that Joe's $30,000, earned by performing actual physical work, deserves to be taxed, but that Frank's $30,000, earned by nothing but having half a million dollars to start with, deserves to be tax-exempt.
That seems much less fair to me.
Jeremy-
No one is arguing that dividends shouldn't be taxed! The whole point is that stockholders *own* a proportion of the company they hold stock in. Therefore, that proportion of the profits the company takes *belong* to the stockholders, dividends are the way the companies distribute them. The point is that the company is taxed on the profits as they are being distributed to the shareholders (read income tax), and then again when the stockholders receive them (read second income tax). Does that sound fair?
Oh, and to all of you (Nora, mathwin, Jeremy, etc.) who are going to cry about how the stockholders didn't "earn" their dividends should think about this:
Stock valuation is not FDIC insured, if the company goes out of business, not only does the investor not earn dividends, but he loses all his investments (think enron, worldcom, etc). The whole stock market is essentially a high-priced, lower-risk lottery. You certainly wouldn't argue that a single welfare-mom should have to pay double taxes on her 1.4 million lotto earnings because she'd still have about half a million dollars after both taxes, would you? Or how about the couple in their late sixties who live off social security and hit $100,000 on a slot machine in atlantic city?
Granted, the rich should bear a greater tax burden than the poor, and they do. However, can you really argue that the rich aren't as entitled to their earnings as the poor, just because they have more?
The richest do receive a more than proportional tax break. Very few people in the middle class receive dividends that are taxed. What they do receive are tied in to their retirement funds, which are already tax exempt. Also, although it sounds simple to say "abolish dividend taxes," the tax code will actually be made much more complicated by the change, and will require intense labor by accountants and lawyers to understand and manipulate the change. Guess who uses high-profile accountants and lawyers? That's right, the rich.
Also, many companies avoid paying taxes on large portions of their profits by abusing loopholes and the like. Thus I'd say we currently have maybe a one-and-one-half taxation, which in my opinion is better than only half taxation.
And yes, I _would_ argue that a "single welfare-mom should have to pay double taxes on her 1.4 million lotto earnings". Anything that encourages people to throw away their futures on lotteries that have been calculated to take money AWAY from the people is a bad idea in my book. I don't really understand your point. The couple in Atlantic City didn't earn their profits either. I see no reason why they shouldn't be taxed as many times as are applicable. (Then again, I also don't see why people should gamble, and I also don't see why the government should condone it. It is a detriment to our society, and let's hope that our new governor's efforts to introduce slot machines are blocked.)
"However, can you really argue that the rich aren't as entitled to their earnings as the poor, just because they have more?"
Easily. It is easy to make money by having money. If you have $1,000,000, you can put it in a bank account and practically live off the interest. Meanwhile, other people who currently do not have wealth must work one or two jobs for the same effect. Although the quality of life for the lower class in this country is higher than in other places in the world and than at other times in history, the rich are SO RICH compared to them that it is almost unbelievable.
Another way to put it. A man is the son of a wealthy lawyer. He gets into Harvard, majors in business, uses his father's connections to get a high-paying corporate job, becomes CEO, pays to have his kids go to top private schools so they can have every advantage, puts millions in the stock market and other investments so he can make more money without doing any work, gets his kids into Harvard with generous contributions to their new science library, buys a second mansion in the Hamptons and a third car for himself and his wife....
Meanwhile thousands of people stuggle for a decent education for their children, a job with decent working conditions....
So, yes, I do believe that the rich are less entitled, because they start with every advantage. Progressive economic policy is the only way to prevent a spiraling rich-get-richer society.
Now lets suppose that the government raised the taxes on the rich. They would still be in Hawaii sipping cocktails, meanwhile the grandfather who had the lung disease might have government payed for health care and less taxes, thus allowing the father and son to become wealthy.
About your figures for how much different income people pay in taxes: Your figures are only for the personal income tax. The Social Security tax is much different, because it is 13.4% of the employee's wages (6.7% from employer, 6.75 from employee) and only on income up to $75,000/year. therefore, the Social security tax is anti-progressive. If you include those in your figures, your percentages of taxes will be much different.
If he gave as much money to Education as he's earmarking for this silly war and to bribe Turkey to let us use their country as base camp, wouldn't that be amazing?! Those poor kids being held captive in that audience (they are not there voluntarily) should throw tomatoes at him!
Chances are, your conception of the rich who drink their white wine spritzers in summer hideouts is dead wrong. The “rich” are actually your average suburban family that works hard for a living.
"Tax cuts for the rich" is an often-abused phrase that blames the general populace without knowledge of any actual economic figures.
By the way, since you seem to support this tax cut, who do you think benefits the most, the "general populace," or the obscenelely rich people making millions a year?
Finally, your conception of the "general populace" is one of the most ignorant and misinformed I have ever heard, and since I know some really conservative people, that is saying quite a lot. The median income for a four person household in the U.S. in 2000 is $62,228 according to the following link.
http://www.census.gov/hhes/income/4person.html
That means that half the four person households in the U.S. are making less than $62,228. It is reasonable to assume that families with only one parent are making considerably less. That is the true general populace. They are barely affected by Bush's obscene tax cut.
So before you go spewing worthless misinformation, do your research before you accuse people of lacking "knowledge of any actual economic figures."