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Class warfare is over: The richest won
Monday, February 12, 2001
By MARK SHIELDS
SYNDICATED COLUMNIST
Now that President Bush's tax bill has been sent to Congress, at least two
conclusions can be fairly drawn: 1) Bush is desperately seeking to close the
widening and socially dangerous gap between the Rich and the Super-Rich; 2)
class warfare is now over -- the richest won.Don't take my word for it.
Listen to Leon Panetta, the son of Italian immigrants who became a U.S. Army
captain, a truly respected California congressman, director of the Federal
Budget and White House chief of staff. For the 35 years I have known Panetta,
I have never heard anyone, even in the backbiting precincts of Washington
politics, question the man's integrity, independence or courage.Recalling
President Reagan's 1981 tax cut and the uninterrupted federal budget deficits
that followed it, and the countless budget summits, spending caps and freezes
after that, Leon Panetta is blunt: "It took us 20 years to dig ourselves and
our nation out of the hole we dug in 1981. ... The American people have a
profound sense of fairness; the Bush tax cut constitutes a windfall for the
best off. ... Fiscal responsibility will be a casualty. This thing (tax bill)
is going to escalate with every interest making sure its own special tax
break is included. They all know there is no way even if it doubles in size
to $3 trillion that Bush will ever veto his signature tax bill."Panetta is
not an infallible prophet. But he was right in 1993 when he helped President
Clinton -- in an ultimately successful effort to stem the hemorrhage of
budget red ink -- to raise income tax rates on the richest 1.2 percent of
Americans. Wrong in 1993 -- and now backing Bush's 2001 tax cut -- was The
Wall Street Journal editorial page, which declared: "This administration gave
up on deficit reduction even before it started. Its 'plan' consists almost
entirely of tax hikes. It would certainly be an upset of historic proportions
if higher taxes actually led to lower deficits" -- exactly what the
Panetta-backed plan did lead to.William F. Buckley's National Review waved
the custom-made shirt of class warfare in 1993: "The income tax rate hike
aimed at the nation's most productive citizens will damage investment, reduce
national savings, slow business and job creation and most importantly, fail
to add a penny of revenue to the federal treasury." The Journal echoed this
defense of the Deserving Rich: The Democratic plan was "designed to punish
success" through "this witch's brew of taxes and mandates, (which is) poison
for the economy."Wrong. Federal income tax revenues accelerated up 40 percent
in the first four years after 1993. But what about that overtaxed top 1
percent? According to an analysis of IRS data done by the Center on Budget
and Policy Priorities, in 1992 "the average after-tax income of the 1 percent
of tax filers with the highest income" was $398,000. By 1997 (the last year
for which full data is available) and long after the punitive increased tax
burdens was placed on them, the top 1 percent of tax filers had an average
after-tax income of $518,000. That amounts to an average income increase for
the richest 1 percent of 30.1 percent.During that same period, the average
after-tax income for the bottom 90 percent of tax filers rose a modest 3.6
percent. So to whose aid does the new Bush tax plan come? That "persecuted" 1
percent who would receive $39,000 each and approximately 40 percent of the
overall tax cut. According to a U.S. Treasury Department study, the top 1
percent of the population under existing law pays 20 percent of all federal
taxes. It doesn't take the master of a Palm Pilot to figure out the top 1
percent would be getting back, in the Bush cut, about twice the portion of
the federal taxes they pay.Panetta, who has been through the frenzied bidding
war of a big tax cut before and who has nursed the fiscal wounds inflicted
upon the nation, fears the fiscal discipline will be the very first
casualty.Just maybe Bush will find time to explain to that single mom of whom
he speaks -- the one who earns $22,000 a year and has two children -- just
why the U.S. government cannot assure that her kids will learn in a safe,
clean and superior school or why their grandmother cannot get her
prescription filled because we need the money to give a tax break to a
billionaire.
Mark Shields is a Washington, D.C., columnist. He is a regular commentator on
CNN's "Capital Gang." Distributed by Creators Syndicate.
