WSWS: Democrats back fourth Bush tax cut for wealthy, business

[Karmadillo]

http://www.wsws.org/articles/2004/sep2004/tax-s28.shtml

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The combined impact of all the new tax provisions has not yet been precisely calculated. But one preliminary study by the Center on Budget and Policy Priorities (CBPP), a well-established domestic policy think tank, found that households in the middle fifth of the income spectrum would receive an average tax cut of $169 in 2005. Households in the top fifth would get an average tax cut of $1,196, while households with incomes between $200,000 and $500,000 would receive an average of $2,172. Lower-income families will gain virtually nothing from the new law.

In terms of total benefits received, households in the top 10 percent will receive 44 percent of the additional income in 2005. Households in the top 20 percent will receive 68 percent of the additional income, while households in the middle 20 percent of households will receive only 10 percent of the total. As the CBPP noted ironically, this is “a peculiar outcome for a ‘middle-class’ tax-cut bill.”

This distribution of the tax cuts is a deliberate policy choice. In the case of the $22.6 billion from a one-year postponement of the alternative minimum tax, 96 percent will go to the top one fifth of households. The tax break for two-income married couples will extend 72 percent of its benefits to the same top fifth.

The benefits for middle-income families come mainly from the extension of the child tax credit. An effort to make this credit available to low-income families who do not pay income taxes—essentially the bottom third of the income spectrum—was defeated by adamant Republican opposition. Although the cost was trifling in terms of the overall size of the bill, between $4 billion and $7 billion over 10 years, right-wing congressmen and senators insisted that such a provision would amount to reestablishment of welfare payments to the poor.

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[dumpster_baby]

1. the socialists always come through with the goods

more honest by far than GOP AND Dems.

[CrispyQ]

2. Well crap. This really makes me feel good about our candidate . . .

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Democratic presidential candidate John Kerry and vice presidential candidate John Edwards did not leave their campaigns to return to Washington for the vote, but both indicated they would have voted for the bill. Kerry issued a statement that tried simultaneously to criticize Bush and endorse the fiction that Bush’s tax cut would aid working people, declaring: “Millions of American families are being squeezed by the weak Bush economy, falling incomes and rising health costs, and we should extend middle-class tax breaks to help them.”

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Thanks John. $169 is really going to help. NOT!

[ozymandius]

3. This was a no-win situation for Dems.

If Dems voted against the measure, they would have been vilified for not having supported middle class families. Repubs would have also pilloried them with claims that they are anti-business as these tax cuts are ostensibly labelled as job incentives. (Though intelligent people know them for what they are - corporate welfare increases.)

The Republican controlled Senate shoved the bill through. The middle class cut was only possible on Repub terms.

Damn it to Hell all the same. If the middle class had received nothing, you can bet that the wealthiest would still have been fed.

[mmonk]

4. precisely

[w4rma]

5. Big media said they were "middle-class" tax cuts.

And all that matters in politics is perception. Unfortunately, Dems don't control the perception.