| Bush-Pushed Tax Cuts
Just more jabs, or the death of democracy?
by Rodger Herbst
Most of us are aware of the Republican fringe science of voodoo
economics, which predicts that cutting tax rates for the rich will
improve the standard of living for the rest of us. Mehrun Eteban, in his
July article "Trickle-Down Economics: Four Reasons Why It Just Doesn't
Work" notes: "Supposedly, top-bracket tax breaks will result in more
jobs being created, higher wages for the average worker, and an overall
upturn in our economy." (see United for a Fair Economy's website at
www.ufenet.org/research/TrickleDown.html)
Eteban compared changes in the top tax rate with the real GDP growth
rate (a measure of the growth of the entire US economy), and three
measures of the economic status of the average working American over the
past 50 years: annual median income growth, annual average hourly wage
growth, and job creation. The data, he notes, strongly refutes any
arguments that cutting taxes for the richest Americans has improved the
economic standing of the lower and middle classes or the nation as a
whole.
Many economists see more jabs than jobs in Bush-pushed tax cuts. In
February 2003, the Economic Policy Institute (EPI) ran a full page ad in
the New York Times: "Ten Nobel Laureates Say the Bush Tax Cuts Are the
Wrong Approach." Over 400 economists nationwide also signed the
accompanying statement, which in part notes "Regardless of how one views
the specifics of the Bush plan, there is wide agreement that its purpose
is a permanent change in the tax structure and not the creation of jobs
and growth in the near term." At a follow-up February 10 news
conference, the Institute noted the Bush tax plan will not create jobs,
and further, that it will bankrupt the government, create chronic
shortages, and make inequality even greater.
(http://archive.epinet.org/real_media/030210/transcript.html)
Among the
signing Nobel Laureates was Joseph Stiglitz, who was forced to resign
from his position as senior vice president and chief economist of the
World Bank because of his outspoken criticism of neo-liberal economic
policies.
Walter Williams, Professor Emeritus at the University of Washington's
Daniel J. Evans School of Public Affairs, sees the Bush tax cuts as even
more pernicious: "President Bush's tax cuts increased the political
power of the richest Americans... Their gains fueled the huge increase
in campaign contributions and made big money the driving force in
national politics."
Big money? According to Public Citizen, George W. Bush has set out to
raise and spend at least $200 million before the September 2004
Republican National Convention--and as of mid-September he's already a
quarter of the way there. Wealthy donors and special-interest groups are
competing to collect $2000 checks, the maximum amount allowable under
the law. Those who raise $100,000 in this way are designated "pioneers"
by the Republican effort, while those who raise $200,000 are hailed as
"rangers". The ranger title is new this year, the result of the ability
to double hard money contributions under the McCain-Feingold "campaign
finance reform" law. Senator John McCain said the obvious: "The fact is
when someone gives large amounts of money, they expect and receive
influence in Washington." (Public Citizen News Sept/Oct 2003)
Williams argues that the "massive maldistribution" of wealth has
severely weakened US political institutions and democracy. His
statements appeared in a paper presented September 6 at the annual
meeting of the American Political Science Association in Philadelphia.
In his conference paper and forthcoming book Reaganism and the Death of
Representative Democracy, Williams documents what he describes as epic
shifts in wealth during the two decades of Reaganism (from 1981 to the
present). For example, the top one percent saw their after-tax incomes
rise 157 percent in real dollars, while the real incomes of the bottom
20 percent of the population actually fell.
Today's rising economic inequality, Williams believes, distorts the
political system and turns ordinary Americans into second-class
citizens. "By the time you or I get into the act," Williams said, "the
candidates are pretty much served up for us by the wealthy interests."
Read Professor Williams' entire conference paper at
http://archive.allacademic.com/publication/docs/apsa_proceeding/2003-08-
20/2857/apsa_proceeding_2857.PDF
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