There are two ways of looking at the tax cuts proposed by President Bush. Those making an argument in support of his plan argue that the reductions will benefit all tax-paying Americans. The common claim thrown out there is that the average working family would receive a return of approximately $1,200 this year alone.
Bush now calls it “an insurance plan against an unpredictable economy.” Six months ago, he said the cuts were necessary in response to a super economy that was giving too much money to the American government. Whichever spin suits your palate, the basic philosophy is that we paid too much for our government and now it’s time to ask what our country can do for us.
Congressional Democrats have been doing their best to fight Bush’s plan for more than a year now. After all, Democrats claim that more than 40 percent of the proposed tax cuts will benefit just 1 percent of the population. The wealthiest 1 percent. Does that sound fair to you?
I’ve spent a lot of time listening to people on both sides of the tax-cut issue. There are extremists who say the proposed tax cuts aren’t enough and other extremists who say there shouldn’t be any tax cuts at all.
Fighting for position near the middle ground are those who are debating the appropriate size of the tax cuts and just whom they should benefit most. Do Bush’s tax cuts predominantly benefit the wealthy? Yes, they do. Does that make them wrong? Not necessarily. I’ll make the argument that the Bush tax cut is in fact the most fair but not necessarily the most effective. While the wealthiest 1 percent truly would receive about 40 percent of the reductions, they also pay the vast majority of taxes.
While I wish our wealthiest 1 percent behaved more like generous citizens, I don’t think we should force them to act that way through guilt and legislation. Rich people are not evil for being successful; what’s evil, or at least unfair, is a system in which the rest of us don’t have the opportunity to catch up.
This is where the Bush proposal runs into some tall hurdles. First of all, I don’t buy for one second the idea that our benevolent, wealthy citizens are going to put their generous tax cuts back into the economy. Even if they do, that extra money is not going to have a significant impact on the worker making a set wage of $7 per hour. We tried trickle-down economics for more than a decade, and it doesn’t work.
The second big hurdle facing Bush’s tax proposal is in the math. During congressional committee hearings, testimony stated that, in fact, the average working family would not receive a $1,200 benefit from the tax cuts. The actual number was closer to $200. Those rumored thousand-dollar returns would not begin taking effect for at least another six years. Not exactly a winning formula for jump-starting a shaky economy.
Personally, I would love it if President Bush would stand before the cameras and tell Americans exactly what his tax cut proposals really mean, and not because I’m a Democrat, and I think his proposals have some serious flaws. It’s because I believe there are actually some very positive points to his proposals that at this point still make them superior to the counterpoints proposed by congressional Democrats.
The most admirable thing about Bush’s proposal is that it actually is targeted at American citizens. Unlike the proposals of former Presidents Bush and Clinton, this is not a cut targeted primarily at corporate and other large business interests. This is hard to admit as a Democrat, but Bush has done an amazing job of standing up to the pressure from business interests to alter his proposals. We never got that much from Clinton.
In fact, his proposal reminds me a lot of the 1986 cut proposed by former President Reagan and approved by a Democrat-controlled Congress. While that tax cut was probably too immediate and large for the economy, it did primarily benefit individuals. It also closed several nasty loopholes that allowed the wealthy to maximize their deductions in ways average citizens could never dream of doing. Unfortunately, in the past 15 years, most of those loopholes have been re-opened and widened.
If the president and Congress really want to help the average American, they should approve a large tax cut. But they should make sure it is fair to all Americans and that it will truly help those most in need. That requires more than just big numbers; it takes even bigger leadership.
President Bush is starting to show that he really can be a strong moral and political leader when he wants to be. He could build the kind of respect Clinton never earned if he maintains his stance of offering tax cuts to individuals and not primarily to corporate interests. More importantly, he has the opportunity to earn the trust of most Americans by telling us exactly why he wants tax cuts across the board.
We spend too much time fighting the war of the rich against the poor. If we really want to make progress on the social and economic issues that matter to most people, we have to be up front about what gaps need to be filled and who has the resources to fill those gaps.
President Bush speaks a lot of respecting the views of all Americans and bringing an era of compassionate conservatism to the political landscape. While he’s out touring the country in support of his plan, he should spend just as much time encouraging his base, that wealthiest 1 percent, to be compassionate with their tax cuts and give at least part of their earnings back to the people who need them most. If that were to happen, then he truly could call himself a uniter and not a divider.