[Hpn] Bush Tax Cut IMPACT on Affordable Housing funds? Your opinion?
Wed, 14 Feb 2001 06:38:42 -0800 (PST)
Class Warfare is Over: The Richest Won - by Mark Shields (fwd
USA President Bush proposes a Federal Tax Cut totaling $1.6 trillion in ten
If passed, how would this Tax Cut affect the liklihood of "increased
federal funding for affordable housing and income supports to the poor"?
FWD Seattle Post-Intelligencer / February 12, 2001
CLASS WARFARE IS OVER: THE RICHEST WON
by Mark Shields
Now that President Bush's tax bill has been sent to Congress, at
least two conclusions can be fairly drawn:
1) Bush is desperately seeking to close the widening and socially
dangerous gap between the Rich and the Super-Rich; 2) class warfare is now
over -- the richest won.
Don't take my word for it. Listen to Leon Panetta, the son of
Italian immigrants who became a U.S. Army captain, a truly respected
California congressman, director of the Federal Budget and White House
chief of staff. For the 35 years I have known Panetta, I have never heard
anyone, even in the backbiting precincts of Washington politics, question
the man's integrity, independence or courage.
Recalling President Reagan's 1981 tax cut and the uninterrupted
federal budget deficits that followed it, and the countless budget summits,
spending caps and freezes after that, Leon Panetta is blunt:
"It took us 20 years to dig ourselves and our nation out of the
hole we dug in 1981. ... The American people have a profound sense of
fairness; the Bush tax cut constitutes a windfall for the best off. ...
Fiscal responsibility will be a casualty. This thing (tax bill) is going to
escalate with every interest making sure its own special tax break is
included. They all know there is no way even if it doubles in size to $3
trillion that Bush will ever veto his signature tax bill."
Panetta is not an infallible prophet. But he was right in 1993 when
he helped President Clinton -- in an ultimately successful effort to stem
the hemorrhage of budget red ink -- to raise income tax rates on the
richest 1.2 percent of Americans.
Wrong in 1993 -- and now backing Bush's 2001 tax cut -- was The
Wall Street Journal editorial page, which declared: "This administration
gave up on deficit reduction even before it started. Its 'plan' consists
almost entirely of tax hikes. It would certainly be an upset of historic
proportions if higher taxes actually led to lower deficits" -- exactly what
the Panetta-backed plan did lead to.
William F. Buckley's National Review waved the custom-made shirt of
class warfare in 1993: "The income tax rate hike aimed at the nation's most
productive citizens will damage investment, reduce national savings, slow
business and job creation and most importantly, fail to add a penny of
revenue to the federal treasury."
The Journal echoed this defense of the Deserving Rich: The
Democratic plan was "designed to punish success" through "this witch's brew
of taxes and mandates, (which is) poison for the economy."
Wrong. Federal income tax revenues accelerated up 40 percent in the
first four years after 1993. But what about that overtaxed top 1 percent?
According to an analysis of IRS data done by the Center on Budget
and Policy Priorities, in 1992 "the average after-tax income of the 1
percent of tax filers with the highest income" was $398,000. By 1997 (the
last year for which full data is available) and long after the punitive
increased tax burdens was placed on them, the top 1 percent of tax filers
had an average after-tax income of $518,000. That amounts to an average
income increase for the richest 1 percent of 30.1 percent.
During that same period, the average after-tax income for the
bottom 90 percent of tax filers rose a modest 3.6 percent.
So to whose aid does the new Bush tax plan come? That "persecuted"
1 percent who would receive $39,000 each and approximately 40 percent of
the overall tax cut. According to a U.S. Treasury Department study, the top
1 percent of the population under existing law pays 20 percent of all
federal taxes. It doesn't take the master of a Palm Pilot to figure out the
top 1 percent would be getting back, in the Bush cut, about twice the
portion of the federal taxes they pay.
Panetta, who has been through the frenzied bidding war of a big tax
cut before and who has nursed the fiscal wounds inflicted upon the nation,
fears the fiscal discipline will be the very first casualty.
Just maybe Bush will find time to explain to that single mom of
whom he speaks -- the one who earns $22,000 a year and has two children --
just why the U.S. government cannot assure that her kids will learn in a
safe, clean and superior school or why their grandmother cannot get her
prescription filled because we need the money to give a tax break to a
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