The Taxonomist

Bush's Prescriptions

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?

Here's the arithmetic: Paying for 80 percent of the cost of seniors' prescription drugs, with a $4,000 outof-pocket
cap and a $23 monthly premium, would cost an average of about $2,000 a year per
senior citizen--a total of $885 billion over the next 10 years. But Bush has
offered only a paltry $48 billion for prescription drug coverage over four years.
Extrapolating that over a decade, Bush's drug plan amounts to about $150
billion--$735 billion short of what it would take to provide adequate coverage.

Meanwhile, the parts of Bush's proposed tax plan that would benefit the
best-off 1 percent over the next 10 years amount to $774 billion. Thus, if Bush
were willing to forgo his tax cuts for millionaires--the average income of the
top 1 percent this year is an estimated $1,117,000--he could more than pay for a
sorely needed prescription drug plan for seniors.

So there you have it. Faced
with two options, (a) give the wealthiest 1.3 million Americans $563,000 each in
tax cuts over the next decade or (b) provide 39 million seniors with adequate
prescription drug coverage, Bush has come down on the side of the rich.

president's priorities are reminiscent of the politics of the 1980s. You may
recall that last summer, after Bush picked Dick Cheney as his running mate,
reporters started digging into Cheney's record. One item that stood out was how
Cheney had repeatedly voted against Head Start funding as a member of Congress in
the early 1980s. Asked why he had been so hard-hearted toward poor preschoolers,
Cheney explained that because of Ronald Reagan's corporate and upper-income tax
cuts in 1981, which he supported, there simply wasn't any money left over for
luxuries like Head Start.

Writing about this in The New York Times in
July, I noted that "if the choice is between welfare for the rich and
opportunities for the needy, Dick Cheney's record makes it pretty clear where he
stands. By choosing him, Mr. Bush may have clarified his own stance as well."
Sadly, that conclusion is now confirmed.

Small and Large Potatoes

Speaking of the elderly, Bush would probably point out that in
lieu of drug coverage he does offer seniors an income-tax cut. True enough, but
the median tax cut for elderly couples and singles under the Bush plan would be
only $150 a year in 2001 dollars, once the income-tax cuts are fully in place in
2006. That works out to a mere $101 a year per elderly person.

How do
other groups fare under the Bush tax-cut plan? Married couples do the best, in
part because they have considerably higher incomes, even on a per-person basis,
than unmarried people do and in part because some of Bush's tax cuts are targeted
to families with children and to two-earner couples. The median-income couple,
making $60,200 this year, would get an average tax cut of $1,095 a year once the
Bush plan is fully phased in. In contrast, the median-income single person,
making $22,800, would get an average tax cut of only $279.

As for the
struggling single parents that Bush disingenuously points to as key beneficiaries
of his plan, the median-income tax cut is little different than for singles at
large: an average of $326 a year starting in 2006.

Of course, the real winners
are seen when you break down the Bush tax cuts by income level. Overall, the
median tax cut under the fully effective Bush plan would be $509, compared with
an average annual tax cut for the wealthiest 1 percent of $54,480.

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