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The Truth, Mainly - 06/09/2003

Understanding the $350 billion tax cuts

I'm still cranky about that $350 billion tax cut. But now, by George, I'm beginning to understand its devious purpose.

I'm still cranky because it's still a rich man's tax cut and I'm still not a rich man. But Warren Buffett is, and he's even crankier than I am. Even though he stands to profit mightily from the cut.

In a Washington Post piece last month, he drew a comparison. Right now, he wrote, his federal taxes "are roughly the same proportion of my income—about 30 percent—as that paid by the receptionist in our office."

But the tax cut could change that.

If Berkshire Hathaway should decide to pay $1 billion in dividends next year, he wrote, "I would receive $310 million in additional income, owe not another dime in federal tax, and see my tax rate plunge to 3 percent."

Here's what makes Warren really cranky: the receptionist would "still be paying about 30 percent," so "her overall federal tax rate would be 10 times what my rate would be."

I was astonished. Not only was a billionaire on my side, I was actually understanding what he was saying.

And the more I understood, the crankier I got.

Remember how the tax cut was supposed to benefit "everyone who pays taxes"? Well, according to economist Paul Krugman, "about 50 million American households—including a majority of those with members over 65—get nothing."

I'm over 65. So I said "Gosh darn it all to heck anyway."

Then I had an epiphany.

It came in the form of a George Will column I read last week. As a Bushite, George seems to understand the administration's motives.

The new tax cuts, he wrote, "will make it more difficult for a Democrat to win the presidency. And should one win, the cuts will make it more difficult to use the presidency for Democratic purposes."

Because, he wrote, even if the tax cuts do not stimulate the economy, "they are justified as the most effective restraint on government spending."

That's when I yelled "Eureka!" and slapped my forehead.

I had always known that cutting taxes for the rich is a good thing because the rich provide the big bucks for political campaigns. But I hadn't understood that cutting taxes was a good thing because it would thwart future "Democratic purposes."

You know, purposes like Social Security and Medicare and Medicaid. Things that allow all of us to enjoy small whiffs of the security that ought to be reserved for rich folk.

I remember back in the Reagan-George I years, the national debt quadrupled. And I remember cynical friends saying that going so far into debt was the Republican way of assuring that we'd never again have any New Deals for the poor because Reagan and George I had spent all the money and then some.

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I thought my cynical friends were nuts. Who could not want us to have Social Security or Medicare or the G.I. Bill of Rights?

Then Bill Clinton was elected and the deficits turned to surpluses and the national debt actually went down. Now I understand why Clinton was so vilified.

It wasn't Monica. It was getting out of the red.

Because getting out of the red made it more likely we'd be able to have, say, more civilized health care. You know, something wild and crazy like those madcap Canadians and Swedes have.

But as Howard Dean said last week, the current administration seems more interested in "defunding" the government. The idea is to defund it so much that if we ever have a Democratic administration again, it won't be able to provide the programs that the people are electing them to provide.

Sounds undemocratic.

That the president's polls are still so high says a lot about the spin put on his policies, about the way he never speaks as plainly as George Will about the hidden purposes of those policies, the logical extension of which is that the best government is the most nearly bankrupt government.

The general consensus is that the spin comes not from the president we sort of elected, but from the guy we never see, the guy who pulls the president's strings, Karl Rove.

And here's how my new understanding of the success of cynicism has corrupted me: If the Democrats are to prevent the Bushites' preemptive strikes on future Democratic purposes, they're going to have to get their own Karl Rove.

I nominate Slick Willie.

He's corrupt enough to be good at it. Just keep him in the back room, out of sight and away from interns.

Whaddya think?


Retired English Professor Leon Satterfield writes to salvage clarity from his confusion. His column appears on alternate Mondays. His e-mail address is: leonsatterfield@earthlink.net.


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