What they tell us: The income tax is unfair. The top one percent of income earners pay one-third of all income tax.
What they don’t tell us: The reason the top one percent pay so much of the income tax is that they have so much of the income. The richest 2.7 million Americans — the top one percent — have as much after-tax income as the bottom 100 million.
What they tell us: The “death tax” (estate tax) takes half or more of a family’s hard-earned savings (and at a most difficult time for the family), requiring land holdings to be broken up and bankrupting family farms and small businesses.
What they don’t tell us: The estate tax applies only to estates of over $650,000 (for single person, double that for a couple), a threshold that will rise to $1 million by 2006. The top marginal estate tax rate is 39 percent, not “over half.” In a typical year fewer than two percent of estates pay any tax at all, and only one in twenty farm estates. The estate tax brings in $27 billion a year, more than double the federal income tax paid by the bottom half of all taxpayers.
What they tell us: We’re in an economic boom. These are good times for America.
What they don’t tell us: We’re in a stock market boom that is overwhelmingly benefiting the rich. Over the past 10 years, 90 percent of stock market gains have gone to the wealthiest 20 percent of households. Since 1977 the average income (adjusted for inflation) of four out of five American households has gone down. However the average income of the top one percent has doubled, from $244,000 in 1977 to $515,000 now.
What they tell us: We have a tremendous budget surplus. We should give that money back to the taxpayers.
What they don’t tell us: We have only a theoretical budget surplus, which will actually come to pass only if a) the economy does not turn down, and b) we make further cuts in government programs — education, the environment, national parks and lands, labor, medical research, health and social services — that benefit taxpayers and that have already been cut to the bone.
Another thing they don’t tell us: The Congress that is using a nonexistent surplus to justify tax cuts is simultaneously violating the budget restrictions that could ever lead to a real surplus. So far this year, Congress has allocated $35 billion in “emergency” spending that circumvents agreed-upon spending caps. The “emergency” money has gone to veterans’ benefits, Kosovo bombing, disaster relief, the year-2000 census, weapons.
What the Republicans tell us: The Republican Congress is trying to hand back to the public an $800 billion tax cut. The Democratic president is going to veto it.
What the Democrats tell us: The Republican tax cut is for the rich only. It will return an average of $22 a year to families in the lowest 20 percent of incomes, $265 a year to a couple making $50,000, $2,700 a year to a family earning $200,000, and $5,100 a year to the richest 20 percent of households.
What neither party gets around to telling us: The president may veto the Republicans’ $800 billion but is inclined to go along with $300 billion of his own cuts. Neither party mentions cutting the one tax that continues to go up, that is paid overwhelmingly by the middle class, and that is actually generating a surplus, namely the payroll or Social Security tax.
What the Democrats seem to be trying to tell us but failing to get across (why are they so bumblingly inarticulate?): The fairest thing to do with the present Social Security surplus and any future general surplus that happens along is to pay down the national debt. In the short term that will save all taxpayers billions of dollars in interest — money that buys no useful government services and flows directly to the rich (the bond-holders). In the long term it will free future taxpayers of a huge burden of interest payments plus debt pay-down, which will make it easier to support higher Social Security costs.
What I wish they would tell us: Are the people who misinform us on these matters so loudly, so vigorously, just plain devious and greedy? Do they like the idea of transferring wealth from the poor to the rich? Do they chuckle about it with their rich campaign donors? Do they think they can fool us?
Or are they willfully ignorant? Do they fail to notice how generously their measures reward the comfortable and afflict the poor?
Or are they taken in by their own ideology? Do they really believe that wealth flows toward virtue and should never be taken away for the public good? Do they actually think that without huge compensation people will have no incentive to produce? If they do think that, how do they expect the 80 percent of workers who can never dream of huge compensation to produce?
Are they blind, or do they think we are? What makes them tick? What do they tell themselves in the dark of the night in the depth of their souls? Could they ever come to see that it would be better for everyone, it would be a joyful relief, it would make the nation and all our lives, theirs too, work much better, if they would just tell us the whole, straight story?