Monument to greed

Gene Lyons



Posted on Wednesday, November 24, 2004



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After eking out a three-point election win, President Bush claimed a 

mandate and announced plans to "reform" the tax code and Social 

Security. Almost needless to say, those reforms conform to the 

reverse-Robin Hood ideal of giving to Bush’s wealthy benefactors while 

taking from wage-earners everywhere. I say "almost" because, hypnotized 

by the president’s folksy drawl, many don’t realize that they’re about 

to be conned out of even the minuscule tax cuts Bush delivered during 

his first term. As described in quasi-official leaks to The Washington 

Post, Bush’s tax plan reads like a scheme crafted by Scrooge McDuck. No 

wonder. Self-pitying tycoons have long funded tax-sheltered GOP 

think-tanks like the Heritage Foundation and the American Enterprise 

Institute dedicated to the return of Gilded Age values. Their reward 

the White House euphemistically dubs the "ownership society." The 

Bush/McDuck plan is a monument to untrammeled greed, a veritable 

swimming pool filled with bullion for trust-fund inheritors like Paris 

Hilton and the president himself to bask and wallow in. 



Without exception, each of the White House’s planned "reforms" would 

have the effect of shifting the federal tax burden away from the rich 

and toward the salaried middle class. It favors wealth over work at 

every turn. 



If Bush gets what he wants from the GOP Congress, a secondary benefit 

would be to raise income taxes in the wealthier "blue" states (most of 

which already send more to Washington than they get back in federal 

spending) even more than in the "red" states that supported him. Nifty, 

huh? 



Oh, and yes, millions of salaried workers would stand to lose 

employer-sponsored health insurance in the bargain. 



Think I exaggerate? According to the Post’s Jonathan Weisman and 

Jeffrey H. Birnbaum, the White House has quit flirting with utopian daydreams 

like a one-size-fits-all "flat tax" or national sales tax (probably 

because at an estimated 25 to 28 percent, the latter might have sparked 

rebellion in Wal-Mart checkout lines). Instead, the plan is to accomplish similar

goals indirectly. 



Here’s the straight dope as the Post reported it. According to Treasury 

Department officials: "The president will pursue a tax system where all 

income—whether from wages, dividends, capital gains or interest—is 

taxed only once. That would mean eliminating taxes on dividends and capital 

gains paid out of fully taxed corporate profits. Most investment gains 

are currently taxed at 15 percent. 



" The administration will also push hard for large savings accounts 

that could shelter thousands of dollars of deposits each year from taxation 

on investment gains, according to White House economic advisers who 

have been involved with the planning. And any tax reform, according to 

Treasury Department officials, would likely eliminate the alternative 

minimum tax, a parallel income tax designed to ensure that the rich pay 

income taxes but one that increasingly ensnares the middle class. "To 

pay for those large tax cuts, the administration is looking at 

eliminating both the deduction for state and local taxes, and the 

business tax deduction for employer-sponsored health insurance. That 

would raise nearly $926 billion over five years, according to White 

House and congressional documents." 



Anybody who’s ever filled out an itemized IRS Form 1040 can read the 

cards. With the estate tax (excuse me, "death tax") on 

multimillion-dollar inheritances already gone, an heiress like the 

aforementioned Paris Hilton, for example—who, until discovering" The 

Simple Life" on FOX, lived off dividends and interest from the family 

trust—might literally end up paying less income tax than her 

hairdressers and bodyguards. So might everybody in the Bush clan. 



Likewise, investors and real estate and stock speculators who live off 

capital gains could avoid income taxes almost altogether. High-salaried 

executives, physicians, professional athletes and others who earn 

considerably more than they spend would be able to shelter much of 

their income in tax-free accounts. 



Ordinary working people would be left holding the bag. So you’d no 

longer have to pay income tax on savings account interest. Big deal. 

Eliminating the state and local tax deduction would cost most taxpayers 

many times more. 



As an added political benefit, residents of "blue" states like New 

York, Pennsylvania and California, who pay far higher state and municipal 

taxes than citizens of, say, Florida and Texas (which have no state 

income tax), would pay considerably more than their "red" state 

counterparts. Readers who doubt me should dig out their own 2003 tax 

returns and do the arithmetic. For most, it ain’t pretty. Given the 

national crisis in health care funding, it’s almost beyond belief that 

even Bush would eliminate deductions for employer-sponsored group 

health insurance, a potential boon to insurance companies selling far more 

expensive—and profitable—individual policies, but a big blow to 

everybody else. It should be axiomatic: Any time a politician mentions 

"family values," get a firm grasp on your wallet. 



• Free-lance columnist Gene Lyons is a Little Rock author and recipient 

of the National Magazine Award. 



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