The Bush tax program

...The government will deliver million of dollars to the wealthiest people in our society, slash spending on programs that aid the middle class and the poor, and create an even more unequal tax system as states impose regressive taxes to replace revenue lost from federal aid to states...

...Win the war—then we'll see...

...MARK LEVINSON is chief economist at the Union of Needletrades Industrial and Textile Employees...

...The historical evidence is weak...

...The 1980s were a period of large reductions in marginal tax rates...

...It's not the size of the deficit but what the deficit is used for...

...According to a Brookings Institution study, the Bush budgetary priorities will require roughly a 40 percent real cut in discretionary spending over the next decade...

...Some 31 percent of the nation's taxpayers would get no benefit from the Bush tax cuts and almost half (48 percent) would receive less than $100 in tax cuts...

...The ghost of David Stockman hovers over this budget...

...B B USH CLAIMS that the tax cut will stimulate the economy...

...They will not stimulate the economy...

...States are struggling with deficits likely to total at least $70 billion this year and $85 billion next year...

...Asked about the ballooning budget deficits, Glenn Hubbard, the departed chair of the president's Council of Economic Advisers, said deficits are neither good nor bad...

...federal and state corporate income taxes amount to only 1.5 percent of our GDP, less than in every other industrial democracy except Iceland...

...The average rate on the poorest 20 percent of families is the highest of all...

...6 n DISSENT / Spring 2003...

...The domestic agenda was the same as the foreign agenda...

...that is, after the economy is expected to have recovered from the current downturn...

...Everything about the Bush administration's tax and budget policy is wrong...

...The average rate on families in the middle 20 percent of the income spectrum is 9.6 percent—almost twice the effective rate that the richest people pay...

...U.S...

...marginal rates on higher income taxpayers were raised in both 1990 and 1993...

...The news gets worse...

...Not bad for a president with no domestic agenda...

...So what will be the effect of Bush's tax and budget program...

...The gargantuan tax cuts will mean that government programs get hammered...

...DISSENT / Spring 2003 n 5 COMMENTS & OPINIONS are necessary because corporate profits are unfairly double-taxed...

...Their effect on domestic social spending will be horrendous...

...IN THE RIGHT MAN, a memoir of his experience as a speechwriter in the Bush White House, David Frum claims that after September 11, "There was no more domestic agenda...

...Under the Bush proposal to cut dividend taxes, Bill Gates would receive thirty-eight million dollars per year in dividends tax free...

...The average state and local tax rate on the most well-off 1 percent of families is 5.2 percent...

...Domestic policy has not been eclipsed by foreign policy...

...The states' dire fiscal crisis is largely the product of the national economic downturn, but Bush's plan will cause states to lose more than four billion dollars a year, making state budget deficits larger...

...And that is precisely the problem (well, one of the problems) with the president's budget: The Bush administration is doing the wrong thing with the money...

...They go to the wrong people...

...Supposedly a response to the slow economy, the package is very poorly designed as an economic stimulus...

...Rather, the administration's domestic policy is being pursued with the same recklessness that characterizes its foreign policy...

...It is cutting taxes on wealthy people when it should be increasing public and private spending and stimulating demand by giving relief to consumers and aiding state budgets...

...John Snow, Bush's secretary of the treasury, would save some $600,000, and Dick Cheney would save $326,000...

...Take for example CSX, the company run by Treasury Secretary John Snow...

...As states raise taxes, our tax system gets more regressive...

...The tax breaks are excessive...

...The budget that George W. Bush sent to Congress had a record $307 billion deficit for 2004, on top of a $304 billion deficit this fiscal year...

...But last year less than half of actual total corporate profits were subject to corporate income tax...

...profits over the past four years...

...The combined cost of the administration's new tax-cut package, the proposal to make the 2001 tax cut permanent, is at least $2.7 trillion through 2013.* The two major pieces of the package are the elimination of individual taxes on corporate dividends and the acceleration of certain pieces of the 2001 tax cut— such as the cuts in income tax rates for upper income filers and the expansion of the child tax credit—so they take full effect in 2003...

...For example, more than 90 percent of the dividend tax cut would not take effect until after 2003...

...Believers in supply-side tax cuts argued that the 1980s tax cuts would ignite greater economic growth while the 1990 and 1993 changes would do significant damage to the economy...

...With federal aid unlikely, states are laying off workers and making deep cuts in health care, education, and public safety funding...

...The 226,000 Americans with an income of over a million dollars would get an average tax cut of almost $90,000 from the Bush growth package alone—while someone in the middle of the population (with an income of $37,000) would get a tax cut of only $256...

...According to President Bush, these tax cuts *The sources for this article are the useful reports from the Center on Budget and Policy Priorities, Citizens for Tax Justice, and the Economic Policy Institute...

...Hubbard is right...

...And this doesn't even take into account the cost of the proposed Iraq War, which is not included in the budget...

...Bush's plan is to slash taxes, generate big deficits, and express regrets that, as compassionate as his conservatism is, he is compelled to cut social programs...

...The arguments made on their behalf are laughable...

...These represent the largest state budget gaps in more than fifty years...

...Their long-term effect on the economy will be damaging...

...Instead, it got rebate checks from the Treasury totaling $164 million...

...Although the image of a president transformed by that terrible day is one Bush would like to cultivate, there is little evidence that it is true...

...Longterm structural deficits will plague our economy for decades...

...The average annual rate of economic growth was as high during the 1990s business cycle as during the business cycle of the 1980s...

...At 11.4 percent it is more than double the effective rate on the very wealthy...

...Never has a tax plan been so skewed toward the rich...

...What matters is what you're doing with the money...

...They are also raising taxes—a step they are forced to take in part because of tax cuts and other cutbacks at the federal level...

...CSX paid no federal income taxes on its $934 million in U.S...

...The 1990s were a period of marginal tax rate increases...

...That is, they are taxed first when companies earn them and second when they're distributed to shareholders as dividends...

...As for personal taxes on dividends, only a small portion of profits are paid out as dividends, and most of those dividends are tax exempt too, because they're paid to pension funds and tax exempt retirement accounts...

...Another way to look at it is that the 226,000 richest tax filers, those with incomes over a million dollars, will receive a benefit roughly equal in size to the 120 million tax filers with incomes below a hundred and twenty thousand dollars...