Jewish World Review March 8, 2001 / 13 Adar 5761
Tax fight turns back to question
of what's 'fair'
IS President Bush's tax plan "unfair," as Democrats claim? In part
it depends on what the meaning of "fair" is, but chances are
that Congress will follow one definition and make it slightly less
generous to the very rich.
Republicans say that Bush's tax cut is fair because it gives
money back to the people who paid it. "This is their money,
after all," goes the GOP mantra.
Since the wealthiest taxpayers pay the most taxes - 40 percent
of all income taxes and almost all of inheritance taxes - they
deserve to get the most money back in a tax cut, by GOP logic.
Democrats are doing their best to make that principle sound
shocking. Responding to Bush's speech to Congress last week,
House Minority Leader Richard Gephardt (D-Mo.) said, "The
President's plan is deeply unfair to middle-income Americans."
"The wealthiest 1 percent, people who make an average of over
$900,000 a year, get 43 percent of the President's tax cut,"he
added. "The President also wants to eliminate the estate tax for
the wealthiest of the wealthy."
At a White House briefing the next day, Treasury Secretary Paul
O'Neill denounced Gephardt's assertion as "a nonsense set of
statistics." Office of Management and Budget Director Mitch
Daniels declared it was based on "50 assumptions that nobody
in their right mind would accept."
The Bush administration, though, had no distribution tables of
its own to offer. It merely redistributed a Bush campaign
document from 1999 revealing that the share of all income taxes
paid by people making more than $200,000 a year would rise
from 39 percent to 41 percent under his plan.
The chart did not account for Bush's plan to eliminate
inheritance taxes, however, which primarily benefits the
According to Citizens for Tax Justice, the liberal group that
came up with the maligned 43 percent estimate for Bush's plan,
the top 1 percent of taxpayers would receive total breaks
averaging $54,500 in 2006.
The Democrats' idea of fairness is to target tax cuts - though
they don't use the word "target" anymore - to the lower middle
and middle class, where the most voters are.
CTJ estimated that the largest share of the newly unveiled
Democratic tax plan, 55.2 percent, would go to taxpayers with
family incomes of $44,000 to $147,000. The top 1 percent of
taxpayers would get 6.5 percent of the benefits.
In terms of dollars, under the Democratic plan, the actual tax
cut for middle-income families would be around $600 a year
(less than Bush's $1,600 because the total tax cut is smaller)
and $2,600 for the top 1 percent, according to CTJ.
Under yet another definition of fairness, the ultra-liberal House
Progressive Caucus has proposed giving every family a $300 tax
cut, regardless of income.
Sounding an even more populist note, the centrist Democratic
Leadership Council unveiled a plan that is more generous to the
working poor than either the Progressive or Democratic plans,
giving up to $2,100 a year to a single mother with two children
who makes less than $20,000 annually.
Former Clinton White House aide Bruce Reed, now a DLCofficial,
declared that "instead of rewarding work, the Bush plan rewards
privilege." The DLC plan would give couples making more than $1
million a tax break of just $1,500 a year.
"American families and American workers built the surplus,"said a
DLC statement. "A tax cut should reflect their values and
Normally one would expect the centrist DLC to recognize that
capital investment also had a role in building the surplus, but
since a number of its leaders are running for the 2004
Democratic presidential nomination, the group seems to be
joining what Republicans denounce as "class warfare."
DLC leaders reject the insinuation. "We've always been for
progressive taxation," said Will Marshall, president of the DLC's
think tank, the Progressive Policy Institute.
Democrats of all stripes are particularly eager to expose one
delicious hole in Bush's case, as pressed in his speech to
Congress - the plight of the single mother making $25,000 who
has to pay a 50 percent marginal rate on any additional money
That's true because she loses earned income tax credit
benefits, but under Bush's plan she would receive not one cent
more in income because, paying no income taxes, she gets no
Both the DLC and Democratic leadership plans expand the EITC
for the working poor (Republicans call this "welfare"), and the
DLC plan provides an income tax credit against Social Security
taxes, which is regressive.
Politically, "fairness" or "class warfare" appeals don't have as
much potency as one might expect.
Still, it's probable that Congress won't give Bush a reduction in
the top income tax rate from 39.6 percent to 33 percent or a
total repeal of the estate tax.
That's fair. Those who pay the most taxes do deserve a break
of some kind. But they also experienced the biggest income
gains during the 1980s and
JWR contributor Morton Kondracke is executive editor of Roll Call, the newspaper of Capitol Hill. Send your comments by clicking here.
03/06/01: Bush and Congress should prepare for lean years
03/01/01: Bush needs group to promote ideas in Black America
02/26/01: Bush should talk about long-term budget challenges
02/22/01: AARP's agenda at odds with Bush priorities
02/20/01: When will Dems finally say Clinton is unfit leader?
02/14/01: McCain won't run against Bush again, just differ on issues
02/12/01: Is Joe Lieberman tilting left toward 2004?
02/07/01: The controversy starts: Bush orders HHS study of fetal, stem cell issues
02/05/01: Dems move toward bush on taxes, but ...
02/01/01: Bush should be open with press
01/30/01: Bush Should go for broke early on education
01/23/01: Clinton ain't going away, folks
01/19/01: Bush should try for legacy as 'Great Reconciler'
01/16/01: Left-Center Rift Re-emerges For Democratic Leaders
01/12/01: Clinton doing Bush no favors in Mideast
01/09/01: Bush and Democrats can deal
12/14/00: Will Daschle make it his business to get along with President Bush?
12/08/00: GOP is in danger of ruining record on medical research
11/27/00: Some fascinating stories about how and why people voted
11/22/00: GOP Survived health bullets, but one is left
11/20/00: Can next president and Hill deal?
11/15/00: With nation split, leaders must reach across party divide
11/07/00: The Envelope, Please:Bush Beats Gore, GOP Holds Hill
11/03/00: Parties appeal to two 'gospels'
11/01/00: Lurking in the shadows
10/26/00: What's Gore's Social Security plan?
10/18/00: While Bush, Gore debate surplus, Congress spends it
10/16/00: Two debates leave lots of questions
10/03/00: What questions should be debated?
09/28/00: Gore and Bush should prepare to lead
09/19/00: Bush let values issue slip away
08/25/00: Gore hands center to Bush
08/22/00: AlGore, look to future, not to Bubba
08/08/00: 2000 race could leave high road for low
08/03/00: Convention must point Bush to center
08/01/00: GOP Readies 'Debt Lockbox' As 2000 Strategy
07/27/00: Cheney adds heft to GOP ticket
07/25/00: Foreign, Defense Policy Deserves Full 2000 Debate
07/20/00: Truman Show: Gore Replays 1948, But Bush Isn't Dewey
07/18/00: Bush Must Fight Gore's Drug Plan As 'Bad Medicine'
07/13/00: Mexico's Election Supports U.S. Action On NAFTA, Bailout
07/10/00: Abortion is good for something --- just ask AlGore
07/06/00: Meet Steve Ricchetti, Bubba's secret weapon
06/30/00: AlGore is down, but is he out?
06/27/00: Social programs caught in election-year game of one-up
06/22/00: Congress Is Near Flunking a Test On School Reform
06/16/00: Doting on the grandparents
06/13/00: On Stem Cells, Bush Has Wrong Pro-Life Stance
06/08/00: Has Gore Caught Bush?
05/26/00: PNTR Vote Could Tell Which Party Fits 'New Economy'
05/23/00: The secret to winning the election: Economic programs
05/18/00: Gore should regroup
05/16/00: McCain's Support Is Tepid, But Lets Bush Focus on Gore
05/11/00: Voters need wonk training
05/09/00: Bush Could Score With Charge That Gore's Too Partisan
04/28/00: Reno's force aids Clinton, not Elian
04/25/00: Should Clinton be indicted?
04/24/00: Can Gore win on Bush tax cuts?
04/18/00: Levin's 'bridge' key to China trade?
04/11/00: Congress, U.S. Voters Still Aren't Ready For Campaign Reform
04/06/00: Bush, Gore Silent As Popular Culture Gets Ever Coarser
03/30/00: Is 2000 Like 1948, 1976 or 1960? Or Is This Unparalleled?
03/28/00: Will Bush, Gore Go for a Better Way To Pick Nominees?
03/23/00: Medicare cutbacks bleed hospitals
03/20/00: Chances Improve That China Trade Will Pass Congress
03/16/00: Lieberman as veep would help Gore
03/14/00: Can Bush, McCain Unite to Beat Gore?
03/09/00: Can GOP Forge Unity After Nasty McCain-Bush Race?
03/07/00: What accounts for McCain's excesses?
03/02/00: 'Debate' Proved Gore Is This Year's Best Gut-Fighter
02/29/00: Surprises! The 2000 GOP race is full of it
02/25/00: Voters want centrist in White House
02/23/00: Gore would hit McCain's record
02/15/00: Will negativity hurt McCain in S.C.?
02/10/00: How hard should Bush hit McCain?
02/08/00: Bush must retool his entire campaign
01/27/00: Could Gore beat Bush as Truman beat Dewey?
01/20/00: Big New Surplus Estimates Could Alter 2000 Politics
12/21/99: Bush improves, everyone panders
12/16/99: Prospects improve for campaign reform
12/14/99: Riots raise free trade as 2000 issue
12/10/99: Gore won GOP 'debate' in N.H.
12/07/99: Election pits Bush cuts vs. Medicare boost
12/03/99: Can race be a constructive issue in 2000?
11/19/99: White House race may be best in decades
11/16/99: Where is Bush on health care fight?
11/11/99: Will TV stop profiteering from politics?
11/09/99: Is GOP isolationist, or just partisan?
11/04/99: Gore, Bradley Run Opposite Races On Style, Substance
11/01/99: GOP, Clinton could reach deal swiftly
10/27/99: Bush to fight 'culture wars' -- positively
10/21/99: Porter, Mack: heroes on medical research
10/19/99: Gore scores among party big shots, but polls go South
10/14/99: Bush critiques could help GOP Congress
10/12/99: Congress can save health care from ruin
10/07/99: Will gun-control cause the GOP to shoot itself in the foot?
10/05/99: Gore moves: Desperate but necessary
10/01/99: Fox, Armstrong make case for NIH
09/28/99: Dems' race brightens Bush's chances
09/23/99: East Timor deflates `Clinton Doctrine'
09/21/99: Buchanan v. Bush? Yeah right
09/17/99: Candidates turn attention to poverty
09/15/99: Bush's education problem
09/09/99: Budget makes 2000 an `issues' election
09/07/99:Airport rage increases, with good reason
09/02/99: U.S. future up for grabs in 2000
08/31/99: U.S. Capitol needs visitor's center -- soon
08/24/99: Will 2000 be the year of the foreign crisis?
08/19/99: Neither party has upper hand for '99
08/17/99: Ford gets freedom medal one month early
08/12/99: There's time to catch Bush, say Gore aides
08/10/99: Rudy, Hillary try much-needed makeovers
08/09/99: GOP must launch new probe of Chinagate
08/02/99: Pols blow fiscal smoke on budget surplus
08/02/99: One campaign reform should pass: disclosure
07/27/99: Gore leads Bush in policy proposals