Will "moderates" - the people formerly known as "conservatives" - ever learn? Today's "conservatives" - the people formerly known as the "radical right" - don't think of a deal as a deal; they think of it as an opportunity to pull yet another bait and switch.
From NYTime.com
Duped and Betrayed
June 6, 2003
By PAUL KRUGMAN
According to The New Republic, Senator Zell Miller - one of
a dwindling band of Democrats who still think they can make deals with the Bush administration and its allies - got
shafted in the recent tax bill. He supported the bill in
part because it contained his personal contribution: a
measure requiring chief executives to take personal
responsibility for corporate tax declarations. But when the
bill emerged from conference, his measure had been stripped out.
Will "moderates" - the people formerly known as
"conservatives" - ever learn? Today's "conservatives" - the
people formerly known as the "radical right" - don't think
of a deal as a deal; they think of it as an opportunity to
pull yet another bait and switch.
Let's look at the betrayals involved in this latest tax
cut.
Most media attention has focused on the child tax credit
that wasn't. As in 2001, the administration softened the
profile of a tax cut mainly aimed at the wealthy by
including a credit for families with children. But at the
last minute, a change in wording deprived 12 million
children of some or all of that tax credit. "There are a
lot of things that are more important than that," declared
Tom DeLay, the House majority leader. (Maybe he was
thinking of the "Hummer deduction," which stayed in the
bill: business owners may now deduct up to 0,000 for the
cost of a vehicle, as long as it weighs at least 6,000
pounds.)
Less attention has been paid to fine print that reveals the
supposed rationale for the dividend tax cut as a smoke
screen. The problem, we were told, is that profits are
taxed twice: once when they are earned, a second time when
they are paid out as dividends. But as any tax expert will
tell you, the corporate tax law is full of loopholes; many
profitable corporations pay little or no taxes.
The original Bush plan ensured that dividends from such
companies would not get a tax break. But those safeguards
vanished from the final bill: dividends will get special
treatment regardless of how much tax is paid by the company
that issues them.
This little change has two big consequences. First, as
Glenn Hubbard, the former chairman of the president's
Council of Economic Advisers and the author of the original
plan, delicately puts it, "It's hard to get a lot of
progressivity at the top."
Translation: wealthy individuals who get most of their
income from dividends and capital gains will often end up
paying lower tax rates than ordinary Americans who work for
a living.
Second, the tax cut - originally billed as a way to reduce
abuses - may well usher in a golden age of tax evasion. We
can be sure that lawyers and accountants are already
figuring out how to disguise income that should be taxed at
a 35 percent rate as dividends that are taxed at only 15
percent. Since there's no need to show that tax was ever
paid on profits, tax shelters should be easy to construct.
Of course, the big betrayal was George W. Bush's decision
to push this tax cut in the first place. There is no longer
any doubt that the man who ran as a moderate in the 2000
election is actually a radical who wants to undo much of
the Great Society and the New Deal.
Look at it this way: as the Center on Budget and Policy
Priorities points out, this latest tax cut reduces federal
revenue as a share of G.D.P. to its lowest level since
1959. That is, federal taxes are now back to what they were
in an era when Medicare and Medicaid didn't exist, and
Social Security was still a minor expense. How can we
maintain these programs, which have become essential to
scores of millions of Americans, at today's tax rates? We
can't.
Grover Norquist, the right-wing ideologue who has become
one of the most powerful men in Washington, once declared:
"I don't want to abolish government. I simply want to
reduce it to the size where I can drag it into the bathroom
and drown it in the bathtub." Mr. Bush has made a pretty
good start on that plan.
Which brings us back to Senator Miller, and all those
politicians and pundits who still imagine that there is
room for compromise, that they can find some bipartisan
middle ground. Mr. Norquist was recently quoted in The
Denver Post with the answer to that: "Bipartisanship is
another name for date rape."ÊÊ
www.nytimes.com/2003/06/06/opinion/06KRUG.html?ex=1055907...
Original: Duped and Betrayed: "Bipartisanship is another name for date rape."