During the debates Dole vowed to enact a "Main Street tax cut" rather than a "Wall Street tax cut". How does this bumper sticker statement hold up to closer examination?
Let's begin our review at the top and see how much our Presidential candidates benefit, as examples of rather wealthy taxpayers (both are in the top 1% of all American wage earners). The Doles would see a $29,146 reduction on their reported $650,000 income for 1995. The Clintons would see a $15,607 increase in their refund on a reported $317,000 of 1995 income. (The average tax cut for all of the top 1% of American taxpayers will be $29,000.) (Figures courtesy of tax experts Deloitte & Touche and Citizens for Tax Justice) Either would be a rather nice increase, wouldn't you say, considering their tax cuts will be larger than most American families earn each year?
In the middle of the spectrum, a married couple with two children earning $30,000 a year would see a tax cut of $1,261. I'm sure we all find that a more than acceptable result. If this situation continued on down through the tax brackets most thinking Americans could happily support the tax cuts.
However, considering that roughly a third of all American children live in families with incomes which fall even below the requirement to pay federal income tax, this gift of a tax cut and per-child credit is a moot point for their families, particularly when combined with Dole's proposed huge cuts in the earned income tax breaks, which exceeds any possible benefits from the 15% cut for these families. Citizens for Tax Justice performed an analysis which shows that the bottom 20% of families (less than $11,000 combined income a year) will actually face a tax increase of $25 a year and the bottom 60% of all American taxpaying families will receive less than 7% of this relief, or about $120 per family, leaving the other 93% of the tax cut for the top 40%.
It is obvious that Mr. Dole's tax cut plan is heavily tilted towards the wealthy. A 15% "across the board" tax cut seems like a good plan but, as even the least educated self-styled economist should be able to understand, it isn't as good as it sounds. It is, instead, just a carbon copy of Reagan's supply-side tax package of the 80's that exploded the nation's deficit and resulted in no appreciable growth in the promised expansion of personal savings or investments. In fact, Dole was a leading opponent of this same "voodoo economics" system from that period that he now so heartily embraces. He even shepherded a huge tax increase through the Senate in 1982 for the express purpose of trying to limit the economic damage of Reagan's excessive 1981 tax cuts.
If Dole or Clinton are truly serious about easing the tax burden on the majority of Americans they should be talking about things like; equal incomes should pay equal taxes (two income families pay more in taxes than a single person whose income is from investments); closing loopholes for small and selected portions of taxpayers (who can afford expensive and skilled lobbyists) that you and I can only dream about and; changing the tax system to encourage investments in long term, job creating areas rather than short term profit-taking ventures which create little but profits for the investor and nothing for the overall economy. If Mr. Dole and President Clinton were serious about anything save their election numbers, they would stop wasting time on these side shows and start focusing on tax fairness.
Finally, Dole's latest tax cut plan lacks any credibility as public policy and shows even less honesty coming from the Senate's premier deficit hawk. It will either balloon the budget deficit by $500 billion or force a 40% cut in all government spending, if entitlement programs like Medicare and Social Security are protected, or huge cuts in these programs as well if they are not excluded. If Mr. Dole's true purpose is to force these cuts in spending by cutting government income, perhaps he should have the integrity to simply run on that platform rather than attempt to shroud his intentions and hope you are foolish enough not to notice. If, instead, he has suddenly been converted to a supply-side adherent, then one must question his conduct of the last thirty years in government. Either way, something is amiss and one can only hope that you, as a voter, can decide for yourself what that might be.
Return To Front Page
Visit Our Unique Shops At:
The Progressive Mind
Impeach The Moron
Rosetta Stone - Your Name In Egyptian Hieroglyphs
Signs of the Zodiac Gifts