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The $1.6 Trillion
Pyramid
by Maren L.
Hickton
This week, Bush began a sweep-states push of his tax cut
plan. Just think: You, too, could be a winner. All those who
want something for nothing can participate just by supporting
his program. Sound too good to be true? Not really. The more
of us who support it, the more likely it will get passed by
Congress.
The way it works is quite simple. It's kind of like a reverse
version of Robin Hood: Steal from the poor, who need social
programs, and give to the rich, who can take care of themselves.
In its broader unsound form, the centerpiece of Bush's budget
is a 10-year oddsmaking scheme offering tax cuts based on
income: the more you make, the more tax relief you get.
In fairness, Bush's Budget Director, Mitch Daniels, conceded
to Fox News Sunday (2/25/01), "Odds are these (financial)
projections will not be accurate; precision is tough ten years
out." He went on to report that Bush's long-term plan is based
on "very cautious assumptions." Assumption is a good word.
For one thing, most Americans couldn't care less about these
tax cuts. They are far more interested in improving education
(93%), keeping America prosperous (93%), dealing with energy
problems facing the nation (86%), keeping the federal budget
balanced (86%) and providing military security for the country
(82%), than cutting federal income taxes (67%), according
to Gallup.
The more people will save in taxes (the rich), the more likely
they are to support Bush's tax cuts. An overwhelming majority
of American's believe that reduced taxes "would not make much
of a difference to them and their families." But they are
wrong.
If these tax cuts are passed in their present form, it would
be disastrous to our economy. Cuts include federal programs
that make telephone service affordable to consumers in rural
areas. Taxpayers do not pay to make the phone service affordable;
we only pay for the administration of the program. So besides
worrying about increasing energy costs, this move could financially
affect many people residing in rural areas, like most of the
states that elected Bush.
Cuts also include the elimination of corporate subsidies
for research and investment. These subsidies come to corporations
in the form of tax breaks, industrial revenue bonds, and tax
increment financing designed to woo businesses to particular
regions to create and increase jobs. The only problem with
"corporate welfare," the "socialistic program" debate name
for these subsidies, has been in the area of monitoring and
accountability - a problem that is actively being addressed.
In 1995, MAPA (Minnesota Alliance for Progressive Action)
won the first comprehensive subsidy disclosure law. And Good
Jobs First documented that at least 36 states, 26 cities and
five counties all attach job quality standards to these subsidies,
which is an 11-fold increase since 1994. While Bush claims
he does not want any "ornaments" on his "Christmas Tree" (budget
proposal), those big corporations, who benefit from these
government incentives, may be your employer who require these
subsidies to continue to develop their business so that they
can give you a paycheck. Jobs are the critical success factor
for creating prosperity. The wealth that this country creates
results from those who contribute taxes to Uncle Sam. And,
as anyone would agree, job security is far more important
than a tax cut: you have to have a job to get one.
Cuts also reportedly include the Export-Import Bank, which
provided $12.6B in loans, guarantees and credit insurance
to boost sales of US goods overseas in the last year. We are
in the midst of a record trade deficit and businesses are
already protesting cuts to the Bank, with good reason: If
you don't export, what does that mean? You lose jobs in the
United States. Again, without a job, you won't get a tax cut.
This is just the beginning of the Bush cut-list. Since he
seems to be confoundedly living in the past, he understands
that the reason that Reagan's tax cuts failed was due to increased
government spending, so he doesn't want to make that monsterous-deficit
mistake again. But not only is he ignoring what American's
want, he, obviously, doesn't have a clue how important jobs
are to this country.
His meeting with President Fox in Mexico, recently, included
a discussion regarding making it easier for the Mexican people
to cross the border and work here: cheap labor. The cost of
living is significantly less in Mexico than it is in the United
States. This includes allowing (unsafe vehicles and products)
truckers to conduct business in this country, which has the
likelihood of reducing US production and wages to many Americans
living in border states. More job loss to American citizens.
Chief of Staff, Andrew Card, discussed how the President's
budget will pay down the debt, "in a very, very fast way,
in fact it will pay down America's debt about as much as you
can possibly pay down that debt," whatever that means. If
any cut involves the loss of jobs, not only will we not be
able to pay down the debt, we will end up in a recession the
likes of which this country has never seen, irrespective of
tax cuts or other worthwhile social programs proposed by Bush.
Increasing education spending by 11%, a 5% increase in Pentagon
spending, plus the reported $1 trillion that he plans to set
aside for Social Security private investment accounts are
all proposals that take a lot of tax money, but do not necessarily
result in adding to the GDP or the creation of jobs. For example,
if Bush really wants accountability in our nation's schools,
can you imagine how much just the federal and state administration
costs of this program will be? There won't be any money left
for additional teachers.
In this Republic, like it or not, social programs are here
to stay. To maintain prosperity, federally funded programs
must include ones that stimulate all businesses, small businesses
and big businesses alike - so that people can have jobs, so
that we can all continue to pay taxes to pay down the debt,
so that we can pay for increases in education spending, pentagon
spending, reforms to our health care system, and Social Security,
PLUS the programs that American's really want, which does
not seem to include R&D funding that Bush is offering to the
drug companies who financed his election.
And any American who continues to call any federal or state
program "socialistic," should immediately return their Social
Security check, stop accepting Medicare, home school your
family, and quit paying taxes altogether.
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