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Bush tax break boosts `regal class'
Linda McQuaig, Toronto Star, January 12,
2003
It's
interesting to imagine how long it took — after the first plane hit the
World Trade Center — before the Bush administration fully grasped the
enormous opportunities that had just opened up.
If that sounds crass, I hasten to point out that I'm not the one
who has taken advantage of the anxious post-9/11 political climate, in
which it's considered unpatriotic to criticize or even question the White
House. The Bush administration has effectively exploited this climate to
push forward dubious policies that, in more relaxed times, would be
subject to considerably more scrutiny and debate.
Of course, the first policies to get a post-9/11 makeover were
those dealing with Washington's ability to use force in the world. With
virtually no opposition, the Pentagon's budget was pushed way up, the
president began speaking openly about pre-emptive nuclear war and the
White House moved plans to win control over Iraqi oil onto the front
burner.
But domestic issues with even less connection to "fighting
terrorism" have also been put on fast-forward, including, as we saw last
week, extreme tax cuts for the extremely wealthy. (Meanwhile, homelessness
is rapidly rising, even among working Americans.)
Of course, tax cuts for the rich didn't just spring up after 9/11.
From the beginning of his presidency, George W. Bush was pushing for a
$1.6 trillion tax cut aimed largely at the rich — the constituency that
lavishly financed his presidential bid and will be counted on to finance
his re-election campaign.
But Bush's tax-cut effort picked up steam after Sept. 11. Suddenly,
a not-particularly-popular and not-convincingly-elected president took on
the mantle of a national saviour, able to peddle just about anything. In
the new political climate, the expectations of the financial elite rose,
and White House efforts to satisfy those expectations became bolder.
The centrepiece of Bush's proposed $674 billion tax cut is the
elimination of tax on dividend income — something that is heavily
concentrated in the hands of the wealthy. The result will be huge deficits
for years to come, providing fuel for those pushing for ever-deeper social
spending cuts. (These deficits should at least finally put to rest any
lingering illusion that the Republican party is the party of fiscal
responsibility.)
The White House has only bothered to place the flimsiest fig leaf
over this latest boondoggle for the rich, asserting that it will provide
"stimulus" for the whole economy. But even some pro-business commentators
admitted there'd be little stimulus in eliminating dividend taxes for the
rich (middle class stockholders already escape tax because their stocks
are in tax-sheltered retirement plans).
The tax cut is unlikely to encourage companies to invest in the
economy; if anything, they'll be under pressure from shareholders to pay
out tax-free dividends instead.
Still, the mainstream media deferentially referred to the proposed
tax cut as the "economic stimulus package."
If economic stimulus were really the goal, almost any other plan
would be preferable — even handing out cash to people passing by on the
street; at least they'd spend it!
What Bush is proposing is so extreme, so unwarranted, so tilted to
the mega-rich, so far from dealing with real problems that it simply
leaves one's jaw in a freefall.
Is there no limit to the level of benefits considered appropriate
to hand over to members of America's "regal class" who, according to
former U.S. Labour Secretary Robert Reich, already enjoy "more wealth and
income than any aristocracy has ever had"?
Is there no point at which fatigue — from continually helping
themselves to an ever-larger slice of the pie — sets in?
Bush's 2001 tax cut delivered an average 10-year saving of $342,000
each to those in the top 1 per cent. Roughly half the benefits of this
year's proposed elimination of the dividend tax will go to that same top 1
per cent. After a while, one's eyes start to glaze over at yet another
statistic illustrating the enormity of the benefits going to the richest
citizens.
It's hard to think of how to describe what's going on without
resorting to words like "plunder." With the public still in a state of
confusion and anxiety — an anxiety constantly stoked by reports of
dark-beige-coloured men doing suspicious things like crossing borders —
the Bush administration is moving hard and fast to plunder the U.S.
treasury on behalf of those who brought it to power.
In the immediate aftermath of Sept. 11, it was clear that the
American right would be emboldened. But who would have dreamt it would
come to this — 9/11 as an opportunity for the biggest heist the rich have
ever attempted.
Linda McQuaig is a Toronto-based author and political
commentator. Her column appears every
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