|
THE POPULIST|Reaganomics at War Episode
A. Scott Piraino In 1981, when Ronald Reagan was sworn in, this
country faced the worst economic downturn since the Great Depression.
President Reagan proposed a novel solution, lowering tax rates on the
wealthiest Americans so they could spend and invest more money. His
administration argued that only this increased economic activity could
lift the country out of recession.Quasi-economic terms like
"supply side" and "trickle down" were used to give Reagan's proposal an
academic veneer. In fact Reaganomics was nothing more than intellectual
camouflage for cutting tax rates on the rich. And if these tax cuts
were unfair and would create the largest national debt in history, well so what.Twenty
five years later our national debt has climbed to 8.5 trillion dollars.
Yearly interest payments on that debt have ballooned to 300 over
billion dollars. But these facts did not deter President Bush. His
administration used the recession of 2001 to justify a 1.35 trillion
dollar tax cut package. Like Reagan, President Bush sold his plan as a
tax break for all Americans, knowing these reductions would favor the
wealthy. While reducing income taxes for everyone, his administration quietly increased payroll taxes on working Americans. Social
Security and Medicare are flat taxes on all wage income. That means
there are no write-offs or deductions, and all payroll income is taxed
at the same flat rate.Of course the wealthiest Americans don't
worry about payroll taxes because they don't have jobs. They own
capital, invested money that makes more money. President Bush reduced
top capital gains tax rate from 20 to 15 percent and cut the top rate
on dividends from 35 to 15 percent. Since this is not payroll income, the owners of capital do not contribute to Social Security and Medicare.What
that means is, an American working a burger flipping job pays 7.5
percent in payroll taxes before his income tax rate is even calculated.
Then he pays income tax on top of that. Now
lets say some Wall Street trader made a million dollars in profits from
stock dividends. He would pay a flat fifteen percent in taxes on all
that money. In other words, the Wall Street Trader would pay taxes at a
lower rate than an American worker flipping burgers. Payroll
taxes account for over one third of federal revenue, and nearly all the
budget surpluses up to 2001. Yet President Bush did not suggest
reducing these taxes, or making them fair. Instead the Bush
administration continues the fiction that workers are contributing to a
"trust fund", while spending the surpluses from payroll taxes as
general revenue.This would have been just another craven transfer of wealth to the rich if not for the tragic events of September 11th. After
the terrorist attacks, the recession of 2001 suddenly looked like an
economic crisis. The surpluses of the previous four years disappeared,
spent on military operations, emergency relief, and a bailout for the
airlines. The Bush administration announced an emergency budget
increase, and a return to deficit spending. The budget deficit for 2002 exceeded 400 billion dollars, a new record high. With
US forces occupying Iraq and Afghanistan, the Bush administration had
the audacity to suggest another round of tax cuts for the wealthy. They
even had the nerve to call it "patriotic tax relief". In the spring of
2003, President Bush signed legislation further reducing taxes by 350
billion dollars. The War in Iraq is costing over four
billion dollars a month, there are one million fewer jobs in this
country than when George the Second took office, our trade and budget
deficits are soaring, and this President either doesn't have a clue, or
he doesn't care. It's not that he believes in Reaganomics, or "supply side", or "trickle down". George Bush doesn't believe in anything. He's a wealthy thief, and a paid mouthpiece for wealthy thieves. Make
no mistake, Reaganomics has done exactly what it was supposed to do. It
has made the richest Americans much wealthier, while transferring more
of the tax burden to the middle class and working poor.There is simply no mystery to Reaganomics. The
poorest Americans have seen their living standards decline over the
last twenty five years, while incomes for our wealthiest citizens have
soared. Under president Bush our wealthiest citizens have received more
tax cuts, while the rest of us pay for the War on Terror, and pay down the debt created by Reaganomics. It's a disgrace....
[ Thu, 31 Aug 2006 20:16:00 GMT ]
|
