Monday, August 30, 2004

The Real Story of Tax Cuts 

So many blogs, especially among the more Republican sites, have trumpetted the Detroit News' editorial about how Bush fails to get deserved credit for tax cut benefits as a great acknowledgement of the President's policies and a repudiation of the Democrat memes of "tax cuts for the wealthy" and "the rich don't pay their fair share". While it does serve both of these purposes, I saw a more sinister message in the data presented.

If you look at the lower two income groups you see that the lower 20% went from paying -4.3% to -5.7% of their income into federal taxes under Bush. While this is not explained in the article, I see no other conclusion than to say that this group now receives 5.7% more than they earn based upon government largess in the federal income tax code. Likewise, the next lower group went from 1.9% to -0.1%, or, in other words, from tax payers to tax consumers. The net result is that now at least 40% of American voters actually have a personal incentive to vote for raising taxes. I have always objected to politicians literally buying votes from lower income constituencies with my tax dollars. This trend is another Ponzi scheme, like Social Security has become, and will end either with the collapse of the "gimme" programs or a complete disenfranchisement of the tax base. Let us hope it is the former.

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