On February 6, 2001 I published this piece, more or less, about the Bush tax plan.  Now that the
Congressional Budget Office has predicted that Bush is going to have to dip into the medicare and
social security trust funds to pay for his give away to the super rich, I thought I would publish an updated version.

From the original rant:

Having appeased the theocrats who make up the foot soldiers of the Republican Party, Bush has now
set out to appease the generals in his hundred million dollar presidential campaign:  The Rich.

To make the millionaires happy, Bush is pushing hard for his massive federal tax cut.  You know, the one
that is going to put nothing in the pockets of the poor, a few hundred dollars in the pockets of taxpayers
in the middle class, and a few hundred thousand dollars in the pockets of the millionaires, which includes
every single talking head on television.

Update:  The tax cut passed, and the most memorable feature was of course the "rebate."  A couple of
points about the "rebate."  First, it wasn't a "rebate" at all.  It was an "advance."  See, if you got a check
from the Treasury, it wasn't a "rebate" on the tax you paid last year, it was instead an "advance" on the
tax you are going to owe next year.  The second point is that although Bush spent millions of borrowed
dollars sending out letters telling us he deserved the credit for the rebate, the truth is he fought it tooth
and nail, and the Democrats in Congress are to thank for it.  (Remember, as long as there is a federal debt,
we are spending borrowed money)  Still, it is no surprise that the Democrats are keeping mum about this fact.
As it turns out, the "rebate" amounted to us collectively borrowing billions from our kids to juice the economy,
but the economy continues to tank.

Back to the original rant:

Bush argued that since the rich pay the majority of federal taxes,
it is only proper that they get the lion's share of tax relief.

Lets be honest for a second.

The Federal Government collects taxes from four primary sources:
The income tax, the social security tax, the medicaid tax and the inheritance tax.

Income taxes and inheritance taxes are progressive.  That means as your income or your inheritance climbs,
so do your tax rates.  This is rooted in the fundamental principle that more taxes should be paid by those who
can most easily afford it, and by those who have benefited the most from the economy.  For example, the
inheritance tax doesn't even apply to estates under $675,000 for a single person, and $1,350,000 for a married
couple.  Basically, unless you are a millionaire, your estate is never going to be charged an inheritance tax at all.

Update:  Although it hasn't taken effect yet, (it will be phased in over the next 11 years) one of the primary
features of the Bush tax cut was the elimination of the inheritance tax.  Despite the fact that such luminaries
as Bill Gates's dad and Warren Buffett lobbied against the repeal as bad public policy, it passed, so we can
look forward to an even more permanent aristocracy built on inherited wealth.  The vast majority of this wealth,
I would hasten to add, is in the form of inherited stock that has a zero basis.  So despite the "double taxation"
rhetoric, the truth is in most cases it was never taxed at all.

Again, back to the original rant:

The medicare tax, on the other hand, is nominally a flat tax.  No matter how much you earn, you pay the same rate,
1.45% of your wages.  Of course, the medicare tax is not applied to any earnings you might have had from stocks
or bonds, so if you include those sources of income, the medicare tax is actually regressive, meaning the poor pay
more as a percentage of income.

The social security tax is also regressive, even if you ignore the fact that like the medicare tax, income from stocks
and bonds is exempt.  The way the social security tax is set up, the highest wage earners pay less as a percentage
of income that do the poor, even ignoring the income they might have from stocks and bonds.

For anyone making under $76,200, the social security tax is 12.4%.  Above $76,200 you stop paying social
security tax altogether.  So, for example, if Dick Cheney makes $15 Million working at Halliburton, he pays
$9,450 in social security taxes, or about  six one hundredths of one percent of his income.  That's right; 0.063%.
In contrast, a twenty two year old single mom making $22,000 a year as a waitress pays the full 12.4%,
or about 200 times the rate for Cheney.

So what does all this have to do with tax cuts?

Well, Bush, quite naturally, is proposing that we fiddle with the progressive taxes, and leave the regressive
taxes alone.  Bush wants to reduce rates across the board on the income tax, eliminate the inheritance tax
altogether, and leave social security and medicare taxes untouched.

Bush wants us to believe that everyone is going to benefit from his tax cut.  But this is simply not true.
Because of the Earned Income Tax Credit, our $22,000 waitress isn't paying any income taxes at all.
But that doesn't mean she doesn't pay taxes; as explained above, she pays full freight on the social
security and medicare.  So while Bush is planning on cutting Cheney's taxes by hundreds of thousands
of dollars, he isn't going to lighten her tax load one bit.

You might argue that social security and medicare are "off budget" and shouldn't be included in this calculation.
That is certainly the argument Bush and his staff are making.  But it isn't really true.

First, Bush's economic adviser Larry Lindsey says that since social security is eventually paid back out to
the taxpayer, it "wouldn't be fair" if they weren't contributing their full share.  Of course, this ignores the fact
that many people who pay into social security for years never see a dime of their money because they die
before the retirement age.  This is particularly true for poor people, who work the difficult, dangerous and
low paying jobs for which Bush provides no tax relief.  In fact, the average life expectancy of a black male
in America with no college education is below the retirement age for social security.  That's right.  black men
in America who don't go to college on average will never collect any social security.

The second reason that Bush's argument is a bunch of hooey is because there really is no such thing as a "surplus."

The only reason we have anything that even looks like a surplus is because we are raiding the funds paid into
social security to pay for general obligations of the government.  So social security isn't really "off budget."
Poor folks who are paying the regressive social security tax are actually subsidizing the federal budget with
their social security taxes.  Al Gore promised to end this by putting those funds in a "lock box."
Saturday Night Live promptly mocked him for it, likely costing him the Presidency.  Thanks a bunch, NBC.

Update:  One way to look at this last paragraph is that I was jumping the gun.  Another way to look at it is
that I was 6 months ahead of the mainstream press is seeing this bit of writing on the wall.  Back to the rant:

There are moments when I have been extraordinarily proud to be an American.  I beamed when we were the
first to put a man on the moon.  I was screaming USA! when a bunch of working class kids beat the Russians
in hockey in the 1980 Olympics.  I was ecstatic when the 24th Marine Expeditionary Unit plucked Air Force
pilot Captain Scott O'Grady off a Bosnian mountainside after his F-16 went down behind enemy lines.

The Democrats in Congress have a chance to make me feel that way again.
All they have to do is defeat Bush's tax plan.

Update:  Well, we know how that story ended.  The Democrats in Congress laid down for the Bush tax cut
the same way they laid down for his theft of the White House, and the stock market reacted accordingly.
Now we are seeing the 10,000-20,000 person layoffs that the Clinton years had convinced us were a thing of the past.  (Remember the Silicon Valley rhetoric circa 1999?  "Its the new economy.  Its different this time."  Like the biggest
economic expansion in history was an accident completely divorced from federal fiscal policy.   Idiots.)

The sad fact is that the Democrats have yet to do a single thing that measures up to Jim Jefford's defection.
I'm still hoping, though.