For the week of January 22 - 28, 2003

Bush’s deceitful ‘average’ tax savings math

Commentary by Pat Murphy

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To householders and businessmen who struggle day by day to balance spending against income, President Bush’s economic calculus—that wild spending and tax cuts will lead to bountiful prosperity—doesn’t make sense.

Now come compelling arguments against and revelations about Bushonomics by the Center on Budget and Policy Priorities (www.cbpp.org), a nonpartisan Washington research think-tank that sees nothing but bleak days ahead and provides dozens of studies on government spending.

Researchers there find Bush’s claims amount to deceit and deception that conceal the real objective of his economic strategy—to reward a small following of extremely wealthy Americans.

Bush’s m.o. is to convince taxpayers they’ll receive a windfall from his tax cut plan, citing what the "average" taxpayer will receive.

But Bush arrives at averages by lumping the very wealthy with the not so wealthy and the impoverished. For example, if the dividend tax were eliminated, as Bush proposes, Microsoft founder Bill Gates would save an estimated $22 million in taxes on dividends just declared by Microsoft. Mix that $22 million (and other huge tax savings on mega fortunes) with the general population and Bush finds an "average" tax savings of $1,083.

The latest Bush "average" being bandied around is the $2,042 he claimed in last Saturday’s radio address would be saved by 23 million small business owners in his new tax proposal. As the Center on Budget and Policy Priorities points out, Bush’s "average" is achieved because very, very wealthy investors in small business will get huge tax breaks, while most would receive about $500 (not $2,042) and 5 million small businesses would receive nothing.

Economist Paul Krugman in a New York Times column mocks the Bush "average" with a caricature of Bill Gates striding into a bar where two men are sitting, one of whom pipes up and says, "We’re rich! The average person in this bar is now worth more than a billion dollars!"

If this new tax cut works like Bush’s first tax cut, the nation faces worse times. Since his last tax cut that he boasted would jump start prosperity, 1.4 million Americans have lost jobs, and the deficit that replaced a surplus is soaring.

Worse, the costs of the war Bush wants to wage on Iraq hasn’t even been calculated into the deficit.

Really bad news, however, is in store for America’s Republican governors and Republican state legislators, who’ve been Bush’s most ardent disciples for draining treasuries through tax cuts.

Total state deficits now total $60 billion. Republican chief executives who once thought tax cuts were swell now plead, to their everlasting embarrassment, for Bush to send aid—quick! Instead, they should be demanding Bush stop destructive plans for another tax cut that’ll inflict even more hurt on the states.

The question for governors, such as Idaho’s Dirk Kempthorne, is whether their mindless loyalty to GOP politics runs deeper than concern for their states’ budget crises.

 

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