House and Senate Republican negotiators reached a final agreement yesterday on a five-year, nearly $70 billion tax package that would extend President Bush's deep cuts to tax rates on dividends and capital gains, while sparing about 15 million middle-income Americans from the alternative minimum tax.
"The point is the preponderance of these revenues will go to upper-income people, people who make a million dollars or more," Sen. Olympia J. Snowe (R-Maine) said yesterday. "It's a question of priorities."
The table accompanying this Post article tells the entire story. People who make $1 million or more in annual income get a $41,977 tax break, while people who make $50,000 -- 74,999 get a whopping $110 break and $403. Wow. Color me impressed.
This simply continues the trend of Bush's tax cut policies. According to the tax Policy Center 55% of the 2003 tax cut package went to people with incomes of $100,000 or more. In addition, cuts in dividends in capital gains disproportionately benefit the upper income levels. 78% of the dividend and capital gains cuts benefited income levels of $100,000 or higher.
"The point is the preponderance of these revenues will go to upper-income people, people who make a million dollars or more," Sen. Olympia J. Snowe (R-Maine) said yesterday. "It's a question of priorities."
Now we know why the hard-cord Republicans don't like Senator Snowe: she tells the truth about Republican policies.
Republican leaders say the tax cuts, especially the investor breaks passed in 2003, are responsible for strong economic growth that has bolstered federal tax receipts over the past year and whittled down deficit forecasts by as much as $70 billion.
Here is a great lie. First, the Republican completely ignore the 2001 tax cuts. They simply forget them. Why? Because nothing really important happened after them - the economy didn't turn-around in a big way. Republicans also forget that interest rates were historically low during this expansion. Real interest rates - interest rates minus inflation - were negative for at least a year: lower interest rates to those levels and everyone borrows money to spend. In fact, the relationship between interest rates and GDP growth was long established as economic fact long-before the "tax cuts pay for themselves" canard became part of the Republican lexicon. The relationship is simple: lower rates, grow the economy; increase rates, slow the economy. It's that simple.
So, the Republicans lie to get tax cuts for their big contributors. Wow - there's something new.
Interested in Texas Politics? Go to Texas Kos