Previous Topic (8/1): Tax Policy

Exemptions from the operation of a tax always create inequalities. Those not exempted must, in the end, bear an additional burden or pay more than their share.
--Stephen J. Field

Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise.
--Thomas Jefferson

Tax Policy

This week we’re going to take a look Bush’s tax policy and its effects on regular Americans and the economy.

Most people have probably heard about Bush’s tax cuts in 2001 and in 2003. As much as I disliked the idea of the tax cuts, I have to admit, as a recent graduate in debt up to my ears, I had a teensy bit of guilt-ridden joy. Maybe I would save some money! Maybe my tax cut would help pay off some of my student loans! But my tax break last year saved me about $80. I still owed the government a little more than $100. I thought this was supposed to stimulate the economy, but it didn’t help me one bit. I didn’t rush out and buy something with the $80 that I didn’t have to pay to the government. If I hadn’t looked it up, I wouldn’t have noticed my “tax break” at all; my budget certainly didn’t notice it. What gives?

George Bush gives! But not to debt-laden folks like me, he gives to the rich folks (those that, as some of you may have seen in footage in Fahrenheit 9/11, Bush calls his “base”). Fifty percent of Bush’s tax cuts will go to the wealthiest 1% of the population. People who make around $1 million a year will get about $90,000 per year in tax breaks. Unless you win the lottery or sell your cow for some magical beans, you can forget about the tax breaks helping you and your family. Bush wants to make those rich folks happy because they’re the ones who finance his campaign. He stands to gain nothing by helping out average people like you and me.

Meanwhile, the lower 49% of us will receive about $100 in tax breaks per year. The lower 80% of us will receive about $239 in cuts per year. In days when the average family owes about $10,000 to credit card companies, $100 or even $239 isn’t enough to make a difference. A study by the Brookings Institute found that between 79 and 80 percent of tax filers would get less than the $1,083 the Administration says the average tax savings from this proposal would be.

Maybe you’d like to pass those statistics off as the ramblings of an angry debt-ridden 20-something that is bitter about not getting a bigger tax cut. Maybe you’d like to think that even if Bush’s tax cuts didn’t really help you, at least Bush didn’t raise taxes like Bush Sr. did. But consider the following: when the federal government reduces taxes in one place, it must reduce spending in another. Though Bush has accumulated record deficits, the administration has drastically reduced federal support to state governments to help make up for those big tax cuts (that will only really help the wealthy…who don’t really need help, because they’re wealthy). Since Bush has been in office, 32 states have raised taxes and fees by $16.2 billion. So you may not be paying more in federal taxes, but rest assured, you are still paying. The government still has to run. Kids still have to go to school and someone still has to pick up the phone when you call 9-1-1.

But, since we’ve had such a crappy economic situation for the last several years, there’s only so much the states can do about raising taxes - like my mom always says, “You can’t get blood from a turnip.” So aside from raising taxes, states have also raised tuition 14% in 2003-2004 at public universities because of less state appropriations due to reduced federal support. States have also reduced eligibility for health insurance; between 1.2 and 1.6 million low-income people (including about 500,000 low-income children) lost their health care coverage because the states couldn’t afford to pay for them. Screw you, poor people! Screw you, kids!

Specifically, Washington State has marked lots of social services that low-income people (those of you who aren’t receiving big tax cuts) rely on. Programs like Medicaid and Basic Health have been reduced. While rich folks are getting their $90,000 that they don’t really need, funding has been reduced for elementary education, higher education, childcare programs, Medicaid, and Temporary Assistance to Needy Families.

For more information about how the tax policy has affected our nation, take a look at the following sites:

"Washington Citizen Action’s Tax Cut Page"

They detail where tax cuts go, and show better ways to spend the money Bush is giving to the wealthy.

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"The Bush Tax Increase"

What? Increase? The 2005 budget would increase lots of taxes in lots of places (like increasing the copay veterans pay for prescriptions) and predicts it will bring in 13% more in tax revenue than the 2004 budget.

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"Bush Tax"

How much is it costing us? Broken down on a state-by-state basis.

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Tax Policy Center

From the Urban Institute and Brookings Institution, everything you’d ever want to know about taxes, and then some.

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