President Bush will unveil his budget next week. During his State of the Union address, he said he wants Congress to make his earlier tax cuts permanent. Remember those? Remember the $1.35 trillion tax cut?
They're the ones that helped take our country from a budget surplus of more than $200 billion in 2000 to a budget deficit of almost $500 billion in 2004.
The good news was that the tax cuts were due to expire in 2010. The bad news is that President Bush wants to make them permanent, at a cost of adding another $2.2 trillion to our deficit over the next 10 years.
Now, let's be clear. Lowering taxes for those that need the most relief is a good idea. But for people like me, tax cuts are a waste of money that could go to worthier causes. Bush's tax cut gave the top 1% tax relief nearly 90 times larger than those in the middle 20%. That's not only unfair, it's a waste.
If you want to have a real impact on real people, shift the cuts toward those that need them most. Not to people like me.
UPDATE: Here is the ad from Bush in 30 Seconds that most closely matches this topic.
President Bush's tax cut plan was ideologically-motivated and full of inequities.
Case in point: the repeal of the estate tax. Can anyone defend the idea of giving someone like me, with an estate potentially valued in the billions of dollars, a multi-billion dollar tax cut? What am I going to do with that money? My family will have much more than enough even after a 50% inheritance tax.
The estate tax should not be eliminated; the exemption should be raised to the neighborhood of $10 million for a couple, so the family farmers and small businesses aren't hurt as much like they have been in the past. But get real: can anyone reasonably argue that someone with a $100 million estate needs tax relief? How about a $1 billion? It's absurd.
There wasn't nearly enough debate on this issue the first time around. I hope there's more debate this time around, and I hope Congress not only says "no" to making these cuts permanent, but they reform some of the worst inequities of the current law, starting with the estate tax.
As far as the U.S. as a whole, and indeed the world, are concerned, I believe the rich are increasingly gaining strength over the democratic masses, as they are increasingly able to reduce the taxes that they are obliged to pay.
The government can hardly stop the corporate forces at work which are pushing taxes lower. In this globalized world, it is becoming easier to move ones wealth to another location with lower taxes and still operate in the primary market. The combination of more specialized tax arms of accounting firms that are experts at manipulating tax laws in order to aide their clients in not having to pay taxes (see Warren Buffet's 2003 annual report http://www.berkshirehathaway.com/2003ar/2003ar.pdf in which the Oracle himself talks about the declining share of the U.S. federal tax receipts being paid by corporations) and a global economy where goods and capital can move around at whim (while human beings cannot), are leading to the rich getting richer relative to the poor (see U.N. report about the growing gap between the richest and the poorest countries in the world http://www.guardian.co.uk/international/story/0,3604,337516,00.html)
The structural change that would stop this trend would be if the governments' powers, like the world's economy, were consolidated as well. What I'm getting at is that there needs to be an international legal/tax system with jurisdiction over all national governments. As it is, there is no impetus for this to happen, because those who have the most to gain from this happening; the masses, do not care enough to make it happen; since they each individually, have so little to gain from the political change, while the rich have so much to gain from governments' increasingly weak grip on the tax situation (potentially hundreds of million- billions per person). The rich have the extreme incentive and resources to change the system, while the masses, as diluted as their interests are among billions of people, do not.
The solution I propose to this problem of lack of interest from the upper class is to show them, to infact show everyone, that their fate is intimately laid with that of the world economy. What I mean by this is not that there are merely indirect benefits of a stronger global economy for each person, but that in this new age of 'one-knowledge', our access to technology is tied to the production of the world economy, and by consequence, the technology available to all is relative to the growth of the world's economy.
The crux of this position is that, with immortality a distant possibility/vague dream with the advent of technology, the rich will need the world economy to grow at a maximum rate in order to increase their chance of being alive when immortality becomes a possibility. Nowadays, for people living in the first world and especially for the rich, material pleasures are free. The only thing not free is time. By spreading this viewpoint, it could give a huge incentive for the rich to desire an overall improvement of the world economy, as nice cars and more houses from tax reductions are nothing compared to thousands of years of life in an ever-evolving world
Posted by: Amin | June 20, 2004 at 03:46 AM