OF PRINCIPALITIES AND POWERS - "Campaign For Fair Tax Reduction"

(01/30/2001)

By Tony Russell

A number of years ago, I became head of a small project. There were only three of us working as full-time staff-a director (myself), an assistant director, and a secretary. The secretary had been with the project from its beginning, and-like many secretaries-she did the bulk of the work in the project. She knew the project inside out, and worked with intelligence and good judgment. I found myself frequently dependent on her to teach me how to perform my job.

It was obvious to all three of us that our salaries were out of line. (The figures I'll use aren't imprecise because of my faulty memory, but are close enough to the truth.) As secretary, she was making $8,000 per year; as director, I was making three times as much--$24,000 per year. So I did a lot of huffing and posturing about how unjust that was, and about how I would address it at budget time. She was impressed with my empathy and crusading spirit.

I cringe to relate the next part. When I drafted the budget, I gave her a 5% raise, and myself a lesser 4% raise, and then gave it to her to type up. With considerable heat and remarkable restraint, she pointed out that the 5% raise amounted to $400 for her, while the 4% raise amounted to $960 for me. So where the gap between our salaries had been $16,000 a year before, it would be $16,520 under the new budget. I was actually widening the income gap-to my advantage.

I wouldn't embarrass myself by revealing this shabby moment from my own history if it didn't help account for the embarrassment I feel at Mr. Bush's tax reduction proposal, which has all the same features-the air of self-righteousness, the shell game with percentages, and the ultimate, self-serving unfairness. His proposal is wrong, it's unjust, and I know because I've been there and done that.

Under his proposal, which changes the percentage of taxes and creates three tax brackets, people with the lowest incomes might find themselves saving from $2 to $20 per year, while people in the highest bracket might find themselves saving from $20,000 to $200,000 or more per year. At first glance, the percentages look good. But when you do what the secretary in our project did-work out the consequences in dollars-, the gross unfairness of the tax reduction screams out at you.

This is the same shell game we've been playing for the past twenty years. Almost every major change in policy has been designed in such a way as to benefit the well-to-do and to widen the gap between those at the bottom and those at the top. When the rich get richer and the poor get poorer-as they have been-, it's not just something that happens. It's a deliberate choice, made by people who know what they're doing. They reshape tax codes and fiscal policies and government spending to their own advantage. This tax reduction proposal by Mr. Bush is nothing new, in that respect. The big winners, as usual, would be the wealthy, who also happen to be big contributors to political campaigns.

But it doesn't have to be that way. If-as Mr. Bush and Mr. Greenspan now argue-we actually need a tax cut, let's do it the American way. Let's do it fairly, in such a way that the benefits fall equally upon rich and poor alike, upon black and white and red and brown, upon male and female, upon old and young. Everybody treated equally. No discrimination. In short, let's give everyone the same dollar amount as a tax break.

I'm not an economist and don't have current economic data at my fingertips, but let's just look at approximate figures to get an idea of what I mean.

Say, first, that you want a tax reduction of $1.5 trillion over 10 years, or an average of $150 billion per year. (That's actually a little less than Mr. Bush's most recent proposal.) And let's say you want to spread that out equally among all our taxpayers and dependents-we'll say among 300 million people, just to make the calculations easy. That means that each year, each person would pay $500 less in taxes. If you are a family of four, you would pay $2,000 less per taxes.

That's a hefty chunk of money for most of us, isn't it? Friends, if your family isn't going to get its $2,000 tax reduction under Mr. Bush's proposal, you've been cheated. You've been discriminated against.


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