Spring Break
Upperclass not over burdened
Mike Spangenberg
Issue date: 2/6/03 Section: Commentary
President Bush's release of his proposed budget for fiscal year 2004 should help reignite the smoldering debate over tax cuts and an economic stimulus plan to help bolster the staggering economy. Many critics of the budget will point to the record deficits it will create in coming years. These critics are on the right path, but miss the point. The point is not that deficits will exist, in fact in times of recession, deficit spending is largely viewed as a fiscally responsible remedy. President Hoover, a rigid conservative with absolute faith in the free market, attempted to balance the budget during the worst depression in history, which only exacerbated the already disastrous situation.
The focus of critics should be on how this deficit will be created. Rather than being created by government spending and assistance programs to help the economy, this deficit will be the result of unconscionable tax cuts to the wealthy, giveaways to big business and the cutting of vital assistance programs.
Bush's conservative tax proposal is rooted more in Republican Party ideology than in any actual analysis of what is needed to help spur the economy. Anyone who has argued tax policy with a conservative has heard the conservative gripe that the top wage earners in this country pay an unfair amount of taxes. Ignoring the fact that the reason rich people pay more in income tax is because they earn a vast majority of the income, conservatives call for a flatter tax system.
There's one glaring problem with this argument: we already have a flat tax system. The reason Republicans don't see this is because they look only at the federal income tax rate when they cry foul. However, as Timothy Noah of Slate.com points out, "the progressivity of the income tax is reversed somewhat by the regressive payroll tax, and even more so by regressive state and local taxes. "Noah goes on to cite a piece written for the New York Times earlier this year by Dan Altman that found that when all taxes are taken into consideration, a person in the bottom quintile of wage earners pays an average of 18 percent of his or her pretax income to the government, while the figure for wage earners in the top quintile is 19 percent. Those in the middle pay between 14 percent and 17 percent in taxes. In other words, writes Noah," on average Americans pay approximately 17 percent of their income in taxes, no matter what income they earn."
The focus of critics should be on how this deficit will be created. Rather than being created by government spending and assistance programs to help the economy, this deficit will be the result of unconscionable tax cuts to the wealthy, giveaways to big business and the cutting of vital assistance programs.
Bush's conservative tax proposal is rooted more in Republican Party ideology than in any actual analysis of what is needed to help spur the economy. Anyone who has argued tax policy with a conservative has heard the conservative gripe that the top wage earners in this country pay an unfair amount of taxes. Ignoring the fact that the reason rich people pay more in income tax is because they earn a vast majority of the income, conservatives call for a flatter tax system.
There's one glaring problem with this argument: we already have a flat tax system. The reason Republicans don't see this is because they look only at the federal income tax rate when they cry foul. However, as Timothy Noah of Slate.com points out, "the progressivity of the income tax is reversed somewhat by the regressive payroll tax, and even more so by regressive state and local taxes. "Noah goes on to cite a piece written for the New York Times earlier this year by Dan Altman that found that when all taxes are taken into consideration, a person in the bottom quintile of wage earners pays an average of 18 percent of his or her pretax income to the government, while the figure for wage earners in the top quintile is 19 percent. Those in the middle pay between 14 percent and 17 percent in taxes. In other words, writes Noah," on average Americans pay approximately 17 percent of their income in taxes, no matter what income they earn."