Just before George W. Bush's inauguration, the Clinton administration put out its final projections of budget surpluses over the next decade. According to a news story in The Washington Post, the analysis predicts about $1.6 trillion in surpluses, assuming that Social Security and Medicare surpluses are off limits and that a collection of tax breaks and programs technically due to expire are extended as they have been in the past. The Post warned, "That would not leave enough to cover Bush's tax cut, which with interest costs could drain revenue by more than $1.9 trillion, let alone his other spending plans."
For corporate America, tax sheltering is all the rage these days. Big accounting firms like PricewaterhouseCoopers, investment banks like Merrill Lynch, and a legion of unscrupulous tax advisers are aggressively marketing their services to otherwise "respectable" companies by promising to help them abuse the tax laws with little chance of detection by the IRS.
In 1998 PricewaterhouseCoopers bragged to Forbes magazine that it was promoting some 30 "mass-market" corporate tax shelters, plus specialty items for big firms willing to pay extra. It said that it had hired 40 salespeople to push its corporate shelters.
Federal personal-income-tax revenues jumped by 11 percent in fiscal 2000, adjusted for inflation. That capped the strongest five-year real growth in personal income taxes that the United States has experienced since the 1960s. In fact, at 10 percent of the gross domestic product (GDP), personal-income-tax receipts are now at their highest level in American history.
Though other federal revenue sources (except real estate taxes) have grown at only average rates, personal income taxes are such a large portion of federal revenues that the inflation-adjusted increase in total federal receipts over the past five years also reflects the highest five-year growth rate since the 1960s.
During the 2000 presidential campaign, George W. Bush tried very hard to
persuade the public that he, like Al Gore, wanted to give senior citizens some
real help in paying for the escalating cost of prescription drugs. But the sad
truth is that Bush has little interest in a solution to this pressing problem.
How else to explain his insistence on spending every penny of what it would take
to provide a solid prescription drug plan for seniors--every penny!--on tax cuts
for the best-off 1 percent of Americans?