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To: Wharf Rat who wrote (12784)2/11/2003 2:21:16 AM
From: stockman_scott  Respond to of 89467
 
The Taxonomist: Evildoer

George W. Bush just can't stop pushing more harmful tax cuts for the rich.

By Robert S. McIntyre
The American Prospect
Issue Date: 2.1.03

If, like our president and vice president, you strongly believe that cutting taxes leads to higher tax revenues, the past year and a half must have been very disappointing. Despite the huge tax cut enacted in the spring of 2001, personal income-tax collections have plummeted since George W. Bush took office, dropping from 10.1 percent of the economy in fiscal 2000 to 9.6 percent in fiscal 2001 to only 8 percent in fiscal 2002. But, sadly, dashed hopes haven't led to second thoughts. On the contrary, Bush has decided that our economy is lagging because his 2001 tax cut simply wasn't big enough. So now he wants to increase it -- by more than half.

Bush's original 2001 tax-cut plan will cost $1.35 trillion over this decade, or $1.6 trillion including interest. The president puts the 10-year price tag on his new tax-cut package at another $674 billion -- $900 billion with interest. That, plus Bush's $114 billion in corporate tax cuts enacted a year ago, brings his hoped-for tax cuts to a total of $2.6 trillion -- so far. Absent a supply-side miracle, Bush seems willing to condemn our country to huge budget deficits forever as long as taxes on the best-off Americans go down.

What does Bush have in store for us this time? In the short run, his latest gift to the wealthiest Americans involves speeding up the income-tax rate cuts enacted in 2001, which otherwise aren't scheduled to take full effect until 2006. The purpose here is to lock in most of his upper-income tax reductions before it becomes even more obvious that we can't afford them. To make his plan look slightly less tilted, Bush also calls for boosting the per-child tax credit to $1,000 now rather than waiting until 2010.

Over the next 10 years, however, most of the cost of Bush's latest tax-reduction program stems from his proposed tax cuts on dividends and capital gains. Although many reporters and investment analysts initially expressed confusion about this scheme, the details are spelled out pretty clearly in a 1992 report written by R. Glenn Hubbard, head of Bush's Council of Economic Advisers, back when he worked in George Bush Senior's Department of the Treasury.

Bush claims his new plan will end the so-called double taxation of corporate profits. But even the administration's chief booster for the dividend tax break, Hubbard, seems to understand that Bush is committing rhetorical fraud. In his 1992 Treasury report, Hubbard admitted that a large share of profits -- most, these days -- aren't taxed at all due to "tax preferences," but he recommended that we should ignore that bothersome fact except in the most egregious cases.

Following this twisted logic, Bush's plan would generally make dividends tax free. There is one caveat, however. Under what might be called the "CSX Exception" (after the notorious tax-avoiding company previously run by Treasury secretary nominee John Snow), a corporation that pays nothing in taxes would not be able to pay its shareholders tax-free dividends. To be precise, dividends would be tax exempt only if they didn't exceed a company's taxable income less dividends paid. Given today's high level of corporate tax avoidance, this rule actually seems to have some teeth. Even so, a company that sheltered two-thirds of its earnings could still pay out one-fifth of its profits in tax-free dividends (more than most companies pay out now) despite the fact that not a penny of those profits was double taxed.

Moving in the opposite direction, there's also the "Microsoft Codicil," designed to appeal to high-tech companies that often don't pay dividends. Under this frighteningly complicated provision, shareholders of a company that pays less than the maximum amount in tax-exempt dividends could be "deemed" to have received a tax-free dividend and reinvested it right back in the company's stock. That lets the shareholders pretend to have paid more than they really did for their stock and thus pay a lower capital-gains tax when they sell it. Within a decade, almost half of the cost of Bush's so-called dividend exemption is likely to reflect lower capital-gains taxes.

Not surprisingly, the benefits of Bush's dividends-and-capital-gains tax cut are extremely tilted toward those who own the most stock -- that is, the wealthiest people. Half of the tax breaks would go to the best-off 1 percent of the taxpayers, and four-fifths would go to the best-off 10 percent.

Bush's zeal to cut taxes for the wealthy seems to know no bounds. If once again that turns out to be a terrible economic strategy, he's apparently willing to bear the political consequences.

________________________________________________________
Robert S. McIntyre is director of Citizens for Tax Justice and a contributing editor for The American Prospect.

Copyright © 2003 by The American Prospect, Inc.

prospect.org



To: Wharf Rat who wrote (12784)2/12/2003 8:34:14 AM
From: stockman_scott  Respond to of 89467
 
Saying no to war

By James Carroll
Columnist
The Boston Globe
2/11/2003

DON'T BE FOOLED by Colin Powell. With testimony before the UN Security Council last week, the secretary of state brought many formerly ambivalent politicians and pundits into the war party. But that is a measure of how callow the entire American debate over war against Iraq has been. The question is not whether Saddam Hussein is up to no good. Powell's indictment confirmed the Iraqi's malfeasance, although with no surprises and no demonstration of immediate threat. The question, rather, is what to do about Saddam's malevolence.

Don't be fooled by Donald Rumsfeld, either. The secretary of defense said in Munich on Saturday, ''The risks of war need to be balanced against the risks of doing nothing while Iraq pursues weapons of mass destruction.'' Just as Powell fudged on what the question is, Rumsfeld fudged on there being no alternative to war. Ongoing and ever more robust inspections, like those proposed by France and Germany, are an alternative to war. Containment is an alternative to war. And an aggressive application of the principles of international law is an alternative to war.

Powell's prosecutorial summary of the case against Saddam should have been prelude not to further warmongering but to a legal indictment of the Iraqi leader for crimes against humanity. In what court, you ask, and under what jurisdiction? America's imminent war takes on an absurd -- and also tragic -- character in the light of what else is happening right now. Last week the International Criminal Court was initiated with the formal election of judges. Next month the court will be official. Its purpose is exactly to deal with offenses like those of which Saddam stands accused. A forceful indictment in such a forum, followed by a trial, verdict, and world-enforced sentence, has an unprecedented potential for a laser-like release of transforming moral energy.

The court intends on the world scene what has already happened within nations -- the replacement of violent force with the force of law. A true alternative to war.

But the 139 nations that signed the agreement no longer include the United States, since George W. Bush ''unsigned'' that treaty early in his term. The US refusal to participate in the new world court makes it irrelevant to the present crisis, but that refusal also lays bare the world's gravest problem -- an American contempt for the creation of alternatives to war.

The most important reason to be skeptical of the Bush administration's claim of necessity has nothing to do with Saddam. It has to do with Bush's own palpable predisposition in favor of war, and when the casus belli is in dispute, predisposition counts for everything.

Powell's performance at the UN was compared to Adlai Stevenson's in 1962, but war was averted in the Cuban crisis, as it had been in the Berlin crisis the year before, precisely because John F. Kennedy's predisposition inclined him away from war, not toward it.

Kennedy's inaugural address, which is often misremembered as a Cold War call to arms, was a straightforward challenge to create new structures of peace. He proposed a litany of political change -- an extension of the ''writ'' of the UN, ending the arms race, replacing the ''balance of power (with) a new world of law,'' a new trust in negotiation (''never fear to negotiate''), an affirmation that ''civility is not a sign of weakness.'' On each of those points -- the UN, the arms race, international law, negotiations, even civility -- the Bush administration has reversed the momentum that began with Kennedy.

And as for war, in the most misremembered passage of all, Kennedy made his repudiation explicit: ''Now the trumpet summons us again -- not as a call to bear arms, though arms we need, not as a call to battle, though embattled we are, but the call to bear the burden of a long twilight struggle, year in and year out . . . a struggle against the common enemies of man: tyranny, poverty, disease, and war itself.''

War itself the enemy. Not the sentiment of ''idealists,'' but the supremely pragmatic conclusion of men and women who saw the horrors of war played out in the 20th century. In rejecting Bush's war, France and Germany honor that memory today, as do the creators of the International Criminal Court. ''War never again!'' Pope Paul VI declared -- also at the United Nations -- in 1965. When he cried, ''No more war!'' a generation of world leaders cheered him -- all but one. Then, too, in that autumn of Rolling Thunder, an American president defied the universal longing for another way. But the pope did not hesitate to cite ''a great man now departed, John Kennedy'' against the warmonger in Washington, and neither do I.

''Mankind must put an end to war,'' the pope recalled Kennedy saying, ''or war will put an end to mankind.''

_______________________________________________

James Carroll's column appears regularly in the Globe.

boston.com



To: Wharf Rat who wrote (12784)2/16/2003 2:54:48 AM
From: stockman_scott  Respond to of 89467
 
Planning for the worst case, while case gets worse

By Ellen Goodman
Columnist
Boston Globe
Published Feb. 16, 2003

BOSTON -- They ought to update the "Worst-Case Scenario Survival Handbook." The authors just weren't imaginative enough.

They got the concept right. "The principle behind this book is a simple one: you just never know." But what you just never knew in 1999 was the easy stuff: how to fend off a shark, escape from killer bees, or deliver a baby in a taxicab.

The only time they come close to antiterrorism advice is when the authors said what to do when you're in the line of gunfire. First of all, "get as far away as possible." Thanks for the tip.

The worst-case scenarios today? Chemical warfare. Biological attack. Dirty bombs. And what have the new tipsters at the Department of Homeland Security suggested for our personal defense? Water, plastic wrap and duct tape.

In half a century we've gone from duck and cover to duct tape. In the 1950s, the government told us hide under the desk in case of nuclear attack. In the 1980s, a Reagan aide said we'd survive nuclear war "if there were enough shovels to go around." You just dig a hole, cover it with a couple of doors and throw dirt on it.

After 9/11, the president's instruction to all Americans was to go shopping. Now, in the inexorable momentum toward war against Iraq, it appears the shop is Home Depot. In Connecticut a man is shrink-wrapping his entire house.

Well, I adore duct tape, that staple of campers and high camp humor. Sealing off a room, scoff the experts, may not protect you against chemicals, let alone radiation. It can't even save my "safe room" from a draft. But anything that can patch pipes and, yes, remove warts is never a total waste.

Nevertheless, I'm afraid that "duct tape and cover" is a symbol of terrorism's victory. What greater delight to our enemies than the image of Americans packing up their survival bags, coloring their anxieties orange? And what stronger adhesive for an administration that wants to wrap the war on terrorism and the war against Iraq into one indivisible package?

The other day George Tenet, the head of the CIA, told the Senate and the country that Al-Qaida was planning terrorist attacks.Within minutes, we heard the crackly voice believed to be Osama bin Laden call for solidarity with Iraq and "martyrdom operations against the enemy."

A State Department official, commenting on the timing, told a reporter, "It's exactly what we wanted. It is, in effect, Al-Qaida saying 'we are linked with Iraq.' " What we wanted? Have we discovered a link between Iraq and Al-Qaida or have we have forged it?

I do not dismiss the possibility of another terrorist attack; I assume it. Frankly, I'd feel safer donating my personal safety budget to the pursuit of Osama or sleeper cells or, for that matter, to the local firefighters and police officers who haven't yet received the promised federal funds to fight terrorism.

But I am also aware of where we stand: The head of Al-Qaida is still apparently on the loose. We're fighting in Afghanistan. North Korea is building nukes and has missiles that can reach the United States -- care for any duct tape, Seattle? And yet we are hellbent, full-speed ahead on the way to a preemptive strike against Iraq.

When asked whether war put us at greater risk, White House press secretary Ari Fleischer dismissed that line of thought as "blackmail." Does he think a cornered Saddam is less dangerous than a contained one?

I fear that this administration is using the best-case scenario in planning for war. A quick victory, a democratic Iraq, a war that will decapitate terrorism rather than disperse it, a joyful Middle East. We all go to the seashore.

But lately I've returned to the pages of a different handbook, Barbara Tuchman's "The Guns of August." It tells in minute detail the fateful decisions that led up to the tragedy of World War I. In her words, "war is the unfolding of miscalculations."

This may be well be our August.

startribune.com