BY MIKE ’01
Picture this: The phone company overcharges you $1,000. When you call to claim a refund, they tell you, “Sorry, we can spend it better than you can. We have some ambitious projects we’d like to fund. It’s our money now. Mwa-ha-ha-ha-ha!”
The federal government admits it has much more than it needs to fund its services. (Finally, a profit Tim Shannon likes.) These tax overpayments will total, under even the most cautious estimates, $5.6 trillion over the next ten years.
Over that ten years, the Government will take in revenues of $28 trillion and President Bush has agreed that the Government will spend $26.4 trillion, part of which will go toward debt retirement and repayments to the Social Security fund. Only a mere $1.6 trillion – 5.7 percent of that $28 trillion – will be refunded to the overburdened taxpayers.
It is this mere 5.7 percent refund that sends Tim “Tax-Man” Shannon and Friends into histrionics. Perhaps Tim loves government soooo much that he routinely mails it checks, thanking it for so wisely investing his tax dollars, and asking it to please, please keep his tax refund this year. But most of us think differently.
Our President, by contrast, is fighting for tax relief to all Americans who have contributed to the surplus – i.e., all taxpayers. President Bush keeps the progressive tax code intact; in fact, he makes it more progressive by giving a larger proportionate cut in federal income tax rates to the poor and middle classes than to the more affluent.
President Bush cuts the bottom tax rate from 15 percent to 10 percent – a 33 percent cut. The President cuts the middle class 28 percent and 31 percent tax rates to 25 percent – cuts of 11 percent and 19 percent, respectively. He lowers the top tax rates, 36 percent and 39.6 percent, to 33 percent – cuts of 8 percent and 17 percent, respectively. As you can see, there is no disproportionate cut in rates for the wealthy; rather, there is a disproportionate cut for our poorest taxpayers. Additionally, President Bush plans to double the current $500 per child tax credit to $1000, which would remove 6 million of our poorest families from the tax rolls altogether. Clearly, President Bush’s policies favor the poor and middle classes much more than did those of his pardon-selling predecessor, who, after running on a middle-class tax-cut platform, actually harmed the poor and middle classes by raising regressive taxes on such things as gasoline.
Let’s apply the new Bush rates to a real-world situation. A family of four making $35,000 or less, like the one I grew up in, would receive tax relief of $1,500, a 100 percent refund.
So President Bush helps the poor and the middle class. What’s in it for us well-heeled lawyers?
Let’s take a hypothetical lawyer – let’s call him, oh, Tim Shannon – making $120,000 next year, with no dependents. Tim receives $3,654 each year in tax savings under the President’s plan, which he can put toward repaying his debt or anything else. Now, if Tim thinks that money belongs to the government, not him, even though he earned it by busting his butt for Skadden, then he can mail it back to Uncle Sam. (Tim, the preppiest wealth-despising class warrior I know, will no doubt keep his tax cut and spend it at Brooks Brothers. Talk about cognitive dissonance.)
Now let’s talk about another issue important to the President, and other Republicans: the death tax.
The tax-happy Tim Shannons of this world think it isn’t enough to tax a person when she or he earns money, spends money, or invests money. They also want to tax you for having saved your money. When you die, if you were noble enough to have put away a substantial sum for your family, The Tim Reaper reaches into your casket and snatches the pennies from off your eyes.
What entitles Tim and his band of marauders to tax your money in life and in death? According to Tim, fairness (or some misguided view thereof). Query: what could be more patently unfair than for the federal government to take away a sizable portion of the money you leave to your family? Saving money for your family is not greed; it is generosity. Next, Tim will propose taxing holiday gifts from parents to their children. “Sorry, Cindy Lou Who, your mommy and daddy forgot to pay the doll tax.” Coming from a political party that hails the value of “choice,” Tim’s respect for Americans’ private economic choices is curiously lacking.
A sad consequence of the death tax is its effect on family farms. American Farm Bureau Federation President Bob Stallman notes: “Too often, farm and ranch families are forced to sell their land, buildings or equipment to meet the financial burden of Uncle Sam’s death tax – a payment the government demands in cash.”
Frequently, Stallman observed, “that land is forever taken out of production and lost to development.” What’s more, nearly 75 percent of all wildlife and half of all endangered species in the United States live on private lands; yet the death tax turns habitat into strip malls and housing subdivisions. Where is Al Gore when we need him?
Tim and I have vastly different views about government and about people. Tim thinks what’s wrong with America today is that the beneficent, omniscient federal government is too small, and spends too little (!). The way to fix this is to establish confiscatory tax rates on the most financially productive Americans and then scream bloody murder about “fairness” any time someone tries to restore actual fairness to the tax code by making all the rates lower.
Tim’s view of people, in contrast, is not so optimistic. Attorneys and others working hard – and being financially rewarded for doing so – are selfish and deserve to be taxed into oblivion. Loving parents who save for their children’s benefit are to be penalized for their charity and thrift. An entirely reasonable 5.7 percent refund on taxes paid – awarded in part to the wealthy (who bear most of the tax burden) but disproportionately to the poor and middle classes – is a risky scheme.
President Bush has it right. Call your home-state members of Congress and tell them so.
Mike Adams is president of the HLS Republicans.