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The Myth of Republican Tax Cuts
April 10, 2002
By Jackson Thoreau

If you're frantically in the midst of finishing that annual math test given by the IRS, you probably don't have time to figure out whether or not you actually received a much-publicized tax cut that Republicans like to claim they gave you in 2001.

You also might not care much, given the explosion in the Middle East that threatens to careen us into World War III, and the Bush administration's failure to calm those waters. In fact, Bush & Co. are only trying to get Israel to stop murdering and terrorizing Palestinians so they can invade Iraq -- a country that even the CIA admits had nothing to do with September 11 -- and keep alive the phony War on Terrorism, which should really be called the Republican Ticket to Stay in Office.

So I understand if you haven't paid attention to this tax cut BS lately. I have to admit I didn't give it a lot of recent thought until over the weekend, when I had to cram to finish my IRS test. Well, I just sent off my test, and I'm not impressed by the questions or the answers. That tax cut the Republicans promised just did not materialize in my house. And our family made well above the median U.S. household income of $39,000 last year.

The ones who really benefited were the super wealthy, a class mostly inhabited by Republicans since Republicans carry their water more than Democrats and other political parties. It's funny - and sad -- how many Republican politicians will argue that they do not labor mainly for the rich. Those who do not stoop to such arguments try to fool you by justifying their kiss-the-super-rich-asses philosophy by saying the super wealthy deserve a proportionately larger tax cut - along with their fourth vacation homes in the Caribbean and yachts -- because they pay a larger share of our taxes. If you beg to differ, you will be called a socialist radical who wants to foment class warfare.

Well, I'm not a socialist - not that there is anything inherently wrong with being a socialist, as a more politicized Seinfeld might say. I prefer to think of myself as someone who really tries to practice "liberty and justice for all" and not just mouth the words and go home when saying our Pledge of Allegiance. I just don't buy the argument that the rich deserve larger tax cuts for several reasons. If I foment class warfare by telling the truth, well, that's tough. Truth has a way of inspiring revolutions, which we sorely need in this country.

First of all, the wealthiest 1 percent of taxpayers in the United States, those making at least $373,000, own about 34 percent of the wealth - more than the bottom 90 percent! - according to the U.S. Federal Reserve Board, which is supposedly nonpartisan. Organizations like the Cato Institute and Citizens for Tax Justice put the top 1 percent's wealth percentage higher, at closer to 40 percent. No other industrial country comes close to matching this imbalance between the very rich and the rest of us. Even in class-conscious England, with its imperial Queen and all, the wealthiest 1 percent own closer to 20 percent.

Furthermore, these very wealthy American families only pay about 20 percent of the taxes, not 34 to 40 percent. Their actual rate is 39 percent, but they get that drastically reduced through tax credits and creative, Enron-like, accounting schemes. In 2001, this 1 percent received an average tax cut from the Bush administration of $53,123; meanwhile, 60 percent of American families only got a cut of $347, on average, according to Citizens for Tax Justice. The poorest 20 percent of American families received virtually nothing. This is not proportionate, and it's not "liberty and justice for all," in my book.

Second of all, those who have wealth have all the advantages of keeping it and making their money grow. They have tax advantages, such as getting abatements and rebates for their businesses and investments. They can contribute more money to politicians, who, in turn, give their firms government contracts -- this is how Ross Perot became a billionaire. They can hide money in Swiss bank accounts and accounts in the Caymans, where they don't pay taxes to the U.S. They can hire accountants like the crooks at Andersen who can find more legal and illegal ways for them not to pay taxes.

Third of all, it makes little sense if you want to help the economy to give more money to these wealthy people who already know how to make their riches grow. They will be fine without tax cuts -- when was the last time you saw a homeless wealthy person? If you give them more money, they will most likely hoard it and won't circulate it back into the economy like those at the lower end will. Tax cuts for the lower and middle classes make more sense to spur the economy.

Fourth of all, there is the moral reason. I'm a Christian, and I take seriously Christ's call for us to help the poor. He told wealthy people on several occasions to sell their goods and follow him. I admit I fall short of meeting Christ's call to sell all my goods to the poor. I have an immediate family to support, something Christ did not directly have, although, of course, he had the larger family of humanity to worry about. But I try to help the poor when I can, such as with my donations, including direct ones to the homeless I meet, and in this column where I'm advocating for their lives as they just try to survive. Bush and many of his supporters claim to be Christians, but I do not see how Bush's tax cuts for the wealthy -- where 45 percent of the cuts go towards 1 percent of the people -- are helping the poor.

It's a myth that everyone's tax bracket went down for 2001. Our family paid at the same level for 2001, and we made more than $50,000 last year. To get even a small $4 break, we would have had to have an adjusted income, after all deductions, of at least $43,800. A single person received his or her $4 break at the $26,250 level of income, after all deductions.

With the U.S. median family income at about $39,000 -- before all deductions -- these adjusted brackets failed to help more than half of all Americans. The main ones benefiting from these adjusted brackets are again the wealthier classes, particularly the richest 1 percent. That is the truth, and it is never going to change, no matter how many Republicans accuse those of us who repeat it of being socialist radicals who want to foment class warfare.

Scottish economist Adam Smith said way back in 1776, "A goal of taxation should be to remedy inequality of riches as much as possible, by relieving the poor and burdening the rich." I wonder how many times he was called a socialist radical. But name-calling or not, it's too bad we don't heed such words.

Given all of the above, I will continue to say that the Bush administration cares mostly about the rich at every occasion I can, as long as I'm still alive. And to help further the latter, I will continue to work for peace and oppose Bush's misguided foreign and nuclear policies at every opportunity.


Jackson Thoreau is co-author of We Will Not Get Over It: Restoring a Legitimate White House. The 110,000-word electronic book can be downloaded here, here, or here. Thoreau can be emailed at jacksonthor@justice.com

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