Lots of career employees at the IRS were annoyed at the partisan tone of
the tax-rebate letters the agency mailed out in July. The IRS has a long
apolitical tradition, and its workers felt uncomfortable with a letter that made
them appear to be shilling for Republican policies.
We are pleased to inform you that the United States Congress passed and
President George W. Bush signed into law the Economic Growth and Tax Relief
Reconciliation Act of 2001, which provides long-term tax relief for all Americans
who pay income taxes.
Earlier this year, soaring gasoline and electricity prices had
much of the public outraged at villainous energy profiteers. So, after careful
study, the Johnny-one-notes in Washington, D.C., who run the Republican Party
concluded that there are only two sensible responses to that particular (albeit
since-subsided) "crisis": drill for oil in the Arctic National Wildlife Refuge
and cut taxes on oil companies and utilities.
Many of the country's biggest corporations are once again paying little or nothing in federal income taxes, according to a new study by the Institute on Taxation and Economic Policy (ITEP).
Corporations are supposed to pay 35 percent of their profits in taxes. But the 250 companies in ITEP's survey paid only 20.1 percent in 1998. That figure was down from 22.9 percent in 1996 and way below the 26.5 percent big companies paid back in 1988, when they had yet to figure out ways around the loophole-closing 1986 Tax Reform Act.
Sooner than anyone imagined only a few
months ago, the inevitable conflict between the Bush tax cuts and public
programs has come to a head.
In January the Congressional Budget Office told us to expect
hundreds of billions of dollars in budget surpluses over the next five years,
beyond the buildup in the Social Security and Medicare trust funds. But now the
CBO and the White House agree that those surpluses will not exist. Instead,
they predict $160 billion to $200 billion in deficits outside of the trust funds
from 2001 to 2005--and the actual shortfall is likely to be considerably higher.
Notably, most of the blame, says the CBO, goes not to the sagging economy but
to Bush's tax cuts.