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Insane
Location: The Local Group
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This preety much sums up my opinion about this "tax cut."
Whacking the Waitresses
Johnathan Alter
Newsweek
And the other effects of George W. Bush’s war on the poor
May 30 — Did anyone see night-shift nurses in the Capitol hallways outside the House-Senate conference committee last week? How about Army privates just back from Iraq?
Quote:
WAITRESSES AND JANITORS and security guards were around, of course, but they somehow didn’t get consulted about the president’s new tax bill either. No lobbyist in a nice suit with a Blackberry roamed the corridors, representing their interests. So it wasn’t until after President Bush signed the bill in front of a 98 percent white audience at the White House (if you don’t believe me, look at the wide angle picture of the signing ceremony in The New York Times), that someone read the fine print and found out that working people mostly got the shaft.
Ah, “working people.” It has almost a quaint ring to it nowadays. I’m talking about Americans who haven’t gone to college (though they’re perhaps hoping to) and are just struggling to make it into the middle class. Reporters used to come more often from these families, and so they knew them better and covered them more. Now we in the media are a little slower on the uptake. It took a billionaire, Warren Buffett, to point out that the Bush tax plan was “class warfare.” Too many of the rest of us have acted as if the Bush administration’s severe tilt toward the rich was an opinion instead of a fact.
The assumption in the whole tax debate has been that, sure, the wealthy will benefit the most (If you earn, say, a million a year, you can expect back about $35,000) but that there’s something in it for everyone. On its Web site last week, the Republican National Committee crowed: “Every taxpayer wins under the new tax bill.” This is simply untrue. An estimated 5 million American taxpayers will get zero, nada, zip. Those are mostly single filers in the 10 percent tax bracket who don’t have children and—because they aren’t exactly rolling in it—don’t have any dividend income.
That’s not counting families earning $10,000 to $25,000 who don’t make enough to pay federal income taxes but are eligible for refundable tax credits. They and their 12 million children get nothing from this bill. While more comfortable middle-class Americans will find their child tax credits and marriage-penalty relief accelerated, these folks will not. The same conservative senators who talk, often persuasively, about the importance of marriage decided to leave the “marriage penalty” in place for those receiving the Earned Income Tax Credit (EITC). In other words, the people who make under $27,000 a year, many of them just struggling to get off welfare, are now the only ones with no tax incentive to marry. “They had a chance to do something to bolster marriage and they chose not to,” says Robert Greenstein of the Center on Budget and Policy Priorities.
The news last week was that all of this happened because lawmakers at the eleventh hour needed to bring the cost of the bill down to $350 billion to suit Sen. George Voinovich, the key swing vote. This is wrong on several counts. First, the $350 billion number is a fiction. The real cost of the tax cut is closer to $1 trillion; the lower number is just part of an elaborate accounting gimmick, as even GOP Rep. Bill Thomas, the chairman of the House Ways and Means Committee, acknowledges. Second, the decision not to help lower-income married couples actually came weeks ago on an 11-to-10 party-line vote in the Senate Finance Committee. The press just didn’t report it. And finally, we were told last week that House-Senate conferees faced a choice between the child tax credit for working families and helping out states with desperate needs. But the total cost for helping working families was less than $8 billion, less than 3 percent of the whole package. A less than 1 percent slower acceleration of the reduction of the top tax bracket or a 5 percent smaller dividend tax cut would have easily paid for it. And Voinovich had no preference on where the money came from.
Meanwhile, the bill signing at the White House was another example of the Bush administration’s “average scam.” The president said that 34 million American families with children will receive an “average” tax cut of $1,549. But the nonpartisan Tax Policy Center figures that 78 percent of families will receive less than that average and 31 percent will receive less than $100. The more relevant numbers—the median tax cuts—aren’t part of the government’s tables.
Why not? Because they’d show that the White House and Capitol Hill Republicans just don’t care a whole lot about helping waitresses and janitors. One of the reasons they feel that way is an assumption that low-income workers receive the EITC anyway, so why give them more? But only about three quarters of those eligible receive the EITC; you have to apply for it, and many lower-income workers fail to do so. To make matters even more troublesome for the working poor, GOP forces on the Hill are trying to crack down on what they see as fraud in the EITC program, which is a Reagan-era idea (greatly expanded under Clinton) that has done more to fight poverty and encourage work than any government program in a generation. They’re pressuring the IRS to require that EITC applicants provide elaborate documentation not requested for wealthier taxpayers who also receive tax credits. The amount the crackdown would save is small, but it’s the thought of nailing “those people” that counts.
After all, helping working families directly is not the point of the bill, which operates from the premise that it’s the rich who create economic growth through investment. In the long run, this makes some sense, though it should be remembered that the greatest boom in American history took place in a period—the mid-1990s—when taxes on the wealthy were raised. But in the short run, it’s working people who spend their tax cuts and credits immediately, injecting money into the economy and creating jobs. So from a purely practical perspective, the new law is not going to help the economy much. Job growth was expected to improve this year, anyway, without legislation. If it does, of course, Republicans will quickly attribute it to their handiwork.
And the Democrats? They are out in force attacking the bill. But there’s nothing about their invective that is the slightest bit memorable. Maybe they figure that rhetoric about the tax cut “nailing the waitresses” would remind everyone too much of Bill Clinton. So say something else. But say it in a way that takes the country just a little closer to the truth about this war on the poor—and on all the people who make the beds, clear the tables and keep us safe.
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If liberty means anything at all, it means the right to tell people what they do not want to hear.
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