Posted on 06/24/2003 3:17:46 PM PDT by NorCoGOP
AMES, Iowa -- What is the latest outrage to come out of Washington that has liberal pundits and activists all worked up? Apparently some mean-spirited Republicans didn't include tax breaks for those who pay no federal income taxes in their latest round of tax cuts.
If it sounds absurd, that's probably because it is -- the latest complaint of Democrats about low-income families being "left behind" in the latest round of tax cuts strategically omits the fact that not only do such families being left out not pay a dime in federal income taxes, but tax cuts they decry as being skewed towards the very wealthy are based on a tax system that skews the burden to these same people.
In 1999 alone, the top one percent of taxpayers paid over one-third of all federal income taxes while the top half of all taxpayers paid 96 percent of all federal income taxes according to the IRS. To quibble over tax relief going to the "privileged" taxpayers is then a complete misrepresentation -- how else does one logically distribute the burden of tax relief when the bottom half of taxpayers only pay 4% of federal income taxes? To claim that low-income families are "entitled" to income tax credits they didn't earn is to effectively embed welfare into the tax code -- a place blatantly unsuited to that end.
Democrats do have one salient objection, however -- while such families do not pay federal income taxes, they do pay other federal taxes, most notably payroll and other taxes which in sum consume upwards of 16 percent of the average low-income earner's salary, with Social Security alone eating up 7.5 percent of each paycheck. More so, the much-acclaimed budget "surplus" of the Clinton years was nothing more than a surplus of the Social Security Trust Fund of almost $105.3 billion, not of federal revenues (which were still almost $10 billion in the red by the end of his term). In as much, it would be logical to argue that tax relief should primarily come from this source of surplus. A reasonable means of implementing such tax relief for low-income families would be raising the excepted income from Social Security withholding (which currently stands at the first $1,400 of income). Raising this limit would give tax relief to all workers, including low-income earners. A better idea would be to simply dismantle the coercive nature of Social Security and allow younger workers to begin to start opting out of the system entirely while the government swallows the bitter pill of picking up existing entitlement liabilities. While clearly an imperfect solution, it would nonetheless provide a means for younger and lower-income workers to free themselves from the onerous burden of payroll taxes that take the largest bite out of their paychecks as it stands presently.
Don't expect the Democrats to embrace either of these solutions, though -- not only would this threaten the "solvency" of a system already teetering on long-term collapse, but if given the rhetoric of some Democratic contenders for the White House, one would think Social Security is a national value up there with life, liberty and the pursuit of happiness. Ironic indeed then that most of these same Democrats are so eager to repeal these tax cuts only to blow the same surplus on new campaign gimmicks like government-mandated health care coverage.
None of this serves to disparage the virtue of Bush's tax cuts (which while labyrinthine in their complexity are clearly overdue to an overtaxed population). Yet the GOP has shown to be just as disingenuous as the Democrats when it comes to budget politics. Funding a cut in federal income taxes (the revenue ostensibly earmarked to fund the general operations of government) by borrowing from a separate entitlement trust instead of cutting federal spending represents just as much of a wealth grab from the middle class as do levying confiscatory taxes to the wealthy to provide tax welfare to the poor.
Taxpayers should pay careful attention to who is offering them "tax relief" in the short term -- by cutting taxes through excessive borrowing rather than cutting spending, Republicans will only serve to shift a higher tax burden onto future generations. But Democrats propose to do the same by fashioning the government into a 21st Century corruption of Robin Hood, robbing from the rich to give tax credits to the poor (meanwhile seizing the same money back through payroll taxes). True tax relief will only come when taxpayers demand their income not be confiscated for redistribution to begin with.
It was dead on arrival. Most of the senate didn't want to make it an issue before 2002 elections, the dems wanted to push it to the floor, where it would have been defeated. The GOP decided to "experiment" with it first in 2002, in some select areas around the country and see what happened.
Rove liked what he saw. In senate races where the republican made it a vocal part of there campaign, didn't back away from it, and made it known they were for privatizing it. They won, Sununu and Dole came out big on it. Those who showed apprhention or were not in favor of it, didn't do as well.
Numbers wise, its looks like a winner, and will be a campaign issue in 2004, the whole 3rd rail of politics is now out the the window in practice. Its just a matter of selling it, and letting people know what its all about, instead of them being mislead by the media.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.