hearts and minds

August 5, 2006

The Bogus Income Tax Cut

Filed under: Sensenbrenner,tax source info,Taxes — Hearts & Minds @ 11:30 pm

There he goes again!

Representative Sensenbrenner’s latest “News from Congress” describes the return this year to massive deficit financing of our national budget (following the historic first-in-my-lifetime balanced budget during the previous administration). He calls it “…an almost balanced budget. Considering what this country has been through recently, this would be a remarkable feat!” That’s what he said – “almost balanced … a remarkable feat”.

Would be, indeed. No wonder we have a return to deficit spending considering we have been through a huge tax cut for the super-rich, followed by massive spending increases on cold war era military technologies.

Sensenbrenner asserts that the “tax relief bill…provides it’s largest percentage reduction in income tax burdens for the lowest income group – those who make less than $30,000 a year.” That’s what he said – “largest…reduction…for the lowest income”.

This statement is not mere hyperbole. Either the Congressman is irresponsibly misinformed on such an important issue, or he is lying to us. There are all kinds of clauses and special provisions in the bill that allow a spin doctor to confuse and obfuscate the real issue, but the facts are that the income tax on a single person’s first $26,250 of taxable income is being reduced 1.2%, while the income tax on taxable income in excess of $288,350 is being reduced 4.6%.

If you’re single and have $26K taxable income, you’ll get about $300 total tax cut. But if you have a million dollars taxable income, you’ll average over $1000 for each $26,000 of your income, for a total tax cut over $40,000! Check it out. The low wage taxpayer’s $26K is worth $300 back. But each $26K of the million dollar income is worth $1000+.

And it doesn’t take an Enron accountant to go figure just how much a low income taxpayer will be able to take advantage of those special provisions like tax-deferred savings accounts and increases in IRA deferment limits. Maybe a frugal union steelworker could use the educational savings account, but how many of those jobs are left now that free trade, fast track, the WTO, NAFTA, FTAA and more are getting jammed down our throats to increase the power and wealth of trans-national corporations.

Back in the 1960’s and ‘70’s, a Fortune 500 CEO average pay was forty times the average worker’s pay. That’s a pretty big class difference. That difference let the CEO back then live in a mansion, cruise in a big yacht, join an exclusive country club, defer his kids from the draft and send them to private Ivy League colleges. Today it’s five hundred times the average employee pay. Today the worker can’t afford a mortgage down payment or a tin skiff and a kicker, and his kids are getting their education in the service industry or the military. We’d better wake up, and while we’re at it, let’s wake up our Congressmen.

March 27, 2002

1 Comment »

  1. great post, I couldn’t have said it better!

    Comment by Mike — September 29, 2006 @ 12:14 pm | Reply

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