As federal budget deficits head back into the stratosphere, most
congressional Democrats remain petrified about frontally attacking the Bush tax
cuts that are the central cause of the problem. Perhaps if they understood that
most of us already face a tax cut freeze they'd be more willing to fight to
extend such a freeze to the richest Americans, too.
Does George Bush have a secret plan to impose a flat tax? I can't read
his mind but one thing is clear: Unless the president's tax program adopted last
year is amended, by the end of this decade most of the personal income tax
revenue will come not from the regular, graduated-rate system but from the
essentially flat rate, individual "alternative minimum tax."
While politicians in Washington have been falling over themselves to
provide huge new tax breaks to corporations and the wealthy, the story in the
states is quite different and quite heartening.
Take, for starters, states' response to the big corporate tax cut that
Congress passed in March at President Bush's insistence. By law or by custom,
almost all states -- with the notable exception of California -- follow federal
rules in their corporate income tax codes. As a result, the central provision of
Bush's so-called stimulus bill -- a vast increase in corporate depreciation
write-offs -- threatened to drain state coffers by upward of $12 billion over the
next three years.
Tax day has come and gone, and about 100 million Americans have filed their income-tax returns. For all the grumbling about complexity -- fair enough, tax filing is way too complicated -- most of us understand that taxes pay for defending our country, protecting our environment, building our roads, educating our children, and all the other essential things we depend on government to do. One thing most people probably don't realize, however, is that almost a fifth of the income-tax dollars we send to Washington aren't spent on these kinds of important programs. Instead, this year more than $170 billion of our money will be paid out in corporate welfare.
It's not often that I agree with Representative Bill Thomas, Republican chairman of the House Ways and Means Committee. But when it comes to his explanation of the so-called stimulus bill that Congress enacted in March, I couldn't agree more. Thomas disputed Washington Post coverage that said the bill would be focused on unemployed workers. And he was right.