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Politics : The Donkey's Inn -- Ignore unavailable to you. Want to Upgrade?

To: Karen Lawrence who wrote (1256)	12/2/2001 5:59:29 PM
From: Karen Lawrence	Read Replies (2) \| Respond to of 15516

DeFazio is a real good guy, even helps Republicans. Anyway, for two weeks,local (Oregon) tv ad campaigns deploring the move to give corporations rebates and urging constituents to call State Senator Gordon Smith (R) have paid off. Just last night, Smith appeared in a tv ad saying he is now working to help the people of this state.

To: Karen Lawrence who wrote (1256)	12/2/2001 8:23:32 PM
From: Mephisto	Respond to of 15516

"Even conservative columnist and CNN host Robert Novak called the corporate AMT repeal a "corporate grant that is not the proper direction for tax or economic policy." I've been thinking about this topic this afternoon. It is difficult to convey what is going on to the American people because of 1) the war: 2) many people are losing their jobs and 3) we are into the Christmas season so people want to push depressing thoughts into the back of their minds.

To: Karen Lawrence who wrote (1256)	12/2/2001 8:39:11 PM
From: Mephisto	Read Replies (1) \| Respond to of 15516

A Sashay to the Right, Some Smiles From the Left "Every day that people read about a bill that would grant I.B.M. a $1.4 billion tax rebate while turning aside Democratic calls for more assistance to laid-off workers is another chance to convince voters that Republicans in general and Mr. Bush in particular are no friends of the little guy. Moreover, the stimulus bill fits a broader pattern of economic policy decisions in which the administration has been criticized for rushing to deal with distressed industries — first airlines and now insurers — while dawdling over help for individuals." The New York Times December 2, 2001 ECONOMIC VIEW By RICHARD W. STEVENSON WASHINGTON -- It was a wish list for corporate lobbyists and conservative ideologues alike. As such, the tax bill pushed through the House this fall by Representative Bill Thomas of California, the Republican chairman of the Ways and Means Committee, was clearly an opening gambit in what was sure to be an intense partisan battle over how to revive the economy. Treasury Secretary Paul H. O'Neill even dismissed it as "show business." It went well beyond what President Bush had been seeking, particularly in granting some of the nation's biggest companies the right to claim, immediately, billions of dollars in tax credits built up over 15 years under the corporate alternative minimum tax. But the administration, Mr. O'Neill's comments notwithstanding, did little to distance itself from the Thomas bill, which has come to embody the Republican position on economic stimulus. In one sense, the bill has had its intended effect. It ensured that bipartisan negotiations over a stimulus package would start so far to the right that Democrats could hope for little more than to drag them back to the center. For that, Mr. Bush is no doubt grateful. But in another way, Mr. Thomas's strategy has backfired. His bill's focus on business tax cuts — 70 percent of its benefits in the first year would go to companies — has proved a political windfall for Democrats. The legislation casts Republicans as champions of corporate interests and the rich at a time when the country is arguably looking for selflessness. For that reason alone, some Democrats have not been unhappy that negotiations on the stimulus package have bogged down. Every day that people read about a bill that would grant I.B.M. (news/quote) a $1.4 billion tax rebate while turning aside Democratic calls for more assistance to laid-off workers is another chance to convince voters that Republicans in general and Mr. Bush in particular are no friends of the little guy. Moreover, the stimulus bill fits a broader pattern of economic policy decisions in which the administration has been criticized for rushing to deal with distressed industries — first airlines and now insurers — while dawdling over help for individuals. Democracy Corps, a liberal advocacy group headed by James Carville, Stanley B. Greenberg and Robert M. Shrum, three of the most experienced Democratic strategists, surveyed voters recently about post- Sept. 11 economic policy. In focus groups, they reported, people could almost not believe that some of the Republican proposals were for real, especially the repeal of the corporate alternative minimum tax and the provision allowing immediate refunds to big companies. "After they accepted the proposition that this was actually happening, they were furious," said Jim Gerstein, the executive director of Democracy Corps. "Items in the package like the A.M.T. repeal are completely at odds with the mood of the country following the attacks. If this is the defining element of the stimulus debate and the overall economic debate, it is very advantageous for Democrats." It is not that the public is against tax cuts. A recent NBC News/Wall Street Journal poll found 50 percent support for the basic Republican approach to reviving the economy — tax cuts, with a special emphasis on tax breaks that encourage businesses to invest and create jobs. Even the Democracy Corps poll found very high levels of support for many Republican ideas, including accelerating the planned reduction in income tax rates for middle- and upper-income people. The notion that Republicans want to cut business taxes because they are beholden to corporate lobbyists and campaign contributors may have some truth to it, but it obscures a more important point: Republicans don't cut taxes because they are told to. They cut taxes because it is in their political DNA to do so. Cutting taxes, more than any other issue, is what defines the party. It helps that there are also legitimate economic arguments in favor of the Republican approach, which is based on the reasonable notion that helping companies — or employers, as Republicans are now careful to call them — will create jobs by supporting renewed investment in plant and equipment. Moreover, with his job-approval ratings at record levels and the nation much more consumed for now with the war against terrorism than with the lurching of the economy, Mr. Bush has not yet felt much of the political pressure to back away from the Republican orthodoxy. Besides, he managed to push the biggest tax cut in 20 years through Congress this year even though public opinion was lukewarm at best. In the end, Mr. Thomas's bill may help Mr. Bush get much of what he wants in the stimulus plan. Whether that proves to be a political victory will have to wait on whether the economy bounces back quickly and strongly. Because once the shooting war in Afghanistan starts winding down, public attention will shift to the recession and what the president is doing to help. And as the current president's father learned a decade ago, the political glow from a well-prosecuted war fades faster than you can say "rising unemployment." nytimes.com

To: Karen Lawrence who wrote (1256)	12/2/2001 8:54:28 PM
From: Mephisto	Respond to of 15516

Last year, IBM reported $5.7 billion in pretax U.S. profits. Despite a supposed 35 percent corporate tax rate, IBM’s actual federal income tax bill was only 3.4 percent of its pretax U.S. earnings. Without the AMT, IBM would have paid a mere 0.2 percent* (AMT is Alternative Minimum Tax) In 2000, Ford Motor Co. reported $9.4 billion in pretax U.S. profits, but it paid only 6.3 percent of that in federal income taxes.* The previous year, Ford paid only 5 percent on $9.3 billion in pretax U.S. profits. Ford’s annual report doesn’t offer full disclosure, but it appears that without the AMT, Ford would have paid virtually nothing in taxes over the past two years. General Motors reported $2.9 billion in pretax U.S. profits in 2000. Despite the AMT, GM paid no federal income tax at all. Instead, GM got a outright tax rebate of $105 million.* In fact, over the past six years, GM has paid nothing in federal income taxes, despite $22.4 billion in pretax U.S. profits! In 1998 and 1999, General Electric reported a total of $21.3 billion in pretax U.S. profits. It paid a mere 8.8 percent of that in federal income taxes. Without the AMT, GE’s tax rate would have been only 4.6 percent. United Airlines earned $1.2 billion in pretax U.S. profits in 1998, but paid only 8.6 percent of that in federal income taxes. Without the AMT, United would have paid only 3.8 percent. Comdisco reported $181 million in pretax U.S. profits in 1998, and paid just 6.1 percent of that in federal income taxes. Without the AMT, Comdisco’s tax bill would have been negative—it would have gotten an outright tax rebate from the U.S. Treasury. Updated to reflect tax benefits from stock options. Compiled from corporate annual reports by Citizens for Tax Justice, Oct.* 2001(updated Nov 2001). ctj.org

To: Karen Lawrence who wrote (1256)	12/2/2001 9:01:29 PM
From: Mephisto	Respond to of 15516

Administration proposal to accelerate income tax cuts would overwhelmingly benefit the wealthy From Citizens for Tax Justice Facing growing public sentiment to delay or repeal future tax cuts to address our nation's economic and budget problems, the Bush administration is pushing for just the opposite. It wants to accelerate the scheduled 2006 reductions in the top income tax rates to 2002. If adopted, the measure would reduce revenues by $120-150 billion over four years. Most of the new tax cuts would go to the richest one percent of all taxpayers, whose average 2002 tax cu would exceed $16,000. Four-fifths of the tax cuts would go to the best-off ten percent. In contrast, for three out of four taxpayers, the administration's proposal would provide exactly zero in tax reduction. "The administration's attempt to use the current crisis as an excuse for further tax breaks for the wealthy is economically indefensible and a slap in the face to ordinary, patriotic taxpayers who are willing to sacrifice for the good of America," said Citizens for Tax Justice director Robert S. McIntyre. "Almost everyone understands that our economy needs both short-term stimulus to boost demand and long-term fiscal restraint to reduce current interest rates on mortgages and business investments," McIntyre said. "Showering new tax breaks on the wealthy would be ineffective as a demand stimulus, and would make our future fiscal problems even worse." ctj.org