COMMENTARY
Thank You, Mr. President
Tax cuts are the centerpiece of Bush’s 2004
budget, and another step towards radically altering both the tax system
and the funding of government programs. By gradually and quietly introducing
his agenda, Bush has already won his first round of tax cuts and the elimination
of the inheritance tax. As Washington Post columnist Allan Sloan points
out, “Had Bush run on a platform to eliminate all taxes on investment
income and to make America safe for inherited wealth, we’d be discussing
the budget proposals presented last week by President Gore.”
With a budget for fiscal year 2004 allotting nearly $1.5 trillion for
Bush’s economic stimulus plan, double the $675 billion figure he
had previously attached to it, Bush is moving to dramatically alter the
nation’s financial structure.
In his State of the Union address, Bush said, “Ninety-two million
Americans will keep this year an average of almost $1,100 more of their
own money.” The statistics Bush uses are incredibly misleading.
It’s true that the mean average tax savings will be $1,100. But
this figure is grossly inflated by the whopping tax cuts that the wealthiest
receive. Bush claims that by cutting taxes for the wealthy, they will
be motivated to spend more money, make more investments, and create more
jobs for middle- and lower-class citizens, and thus eventually help the
poor. This is a policy known as “supply-side economics” or
the “trickle-down effect,” a hallmark of Reagan’s economic
policy.
But trickle-down economics failed to help the poor then, and only drove
the U.S. further into debt. Bush also borrows from Reaganomics in his
budget proposal to remove federal oversight from many social service and
welfare programs (notably Med-icaid) by allocating block grants to states
instead of directly to certain programs. Thus, states can maintain their
own agenda when divvying up the funds.
“I am one of the few people who still are not as yet convinced that
stimulus is a desirable policy at this particular point,” Federal
Reserve Chairman Alan Greenspan, the country’s Republican economic
guru, told the Senate Banking Committee in February. He warned that the
taxation of stock dividends should not be eliminated unless it was balanced
by tax increases in other areas. He also predicted that the rising federal
deficit would be a drag on the market, directly contradicting Bush’s
economic team.
Other conservatives are wary as well. Congressional Republicans have criticized
Bush’s proposal to end the tax on stock dividends and to allow citizens
to create tax-free savings accounts, which would allow wealthy families
to stash away large sums of money — a move which could have a large
effect on future federal tax revenue. “I just don’t think
we can go as far are the president proposes,” said Rep. Rob Portman,
a Bush ally. Sev-eral other Republicans have made it clear that the savings
plan proposal is unlikely to be passed.
In his State of the Union address, Bush promised that, “We will
not deny, we will not ignore, we will not pass along our problems to other
Congresses, to other presidents, to other generations.” He has apparently
forgotten about who’s going to foot the very fat bill for his two
rounds of tax cuts: we students, the next generation of taxpayers. Both
of Bush’s plans shrewdly push a majority of the necessary spending
cuts to the last two years of the decade plan, in 2008. Coincidence or
otherwise, this happens to be the last year possible for Bush to be in
office.
Around that same time, a decade from now, as the boomer generation retires,
Social Security will start running deficits. Though not caused by Bush’s
tax policy, his tax cuts, proposed tax-free savings funds, and the already
eliminated inheritance tax, compound the problem. We, the future tax payers
of America, have received a generous gift from President Bush: an enormous
federal deficit, tax cuts which will widen the gap between the poor and
the affluent, substantial federal funding cuts at the end of his tax plan,
and a tax system wholly unprepared for the huge burden coming over the
next 30 years.
By refusing to put aside his own agenda in order to meet the nation’s
current and future fiscal needs, Bush has saddled future generations of
Americans with an enormous burden to bear.
