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The Honolulu Advertiser

Posted on: Tuesday, December 31, 2002

Bush seeks another tax cut for the rich

Not satisfied with last year's huge tax cut package totalling $1.6 trillion, President Bush will soon be back for more.

His aides are urging him to propose cutting taxes on corporate dividends for shareholders by about half.

The 50 percent tax cut would cost the Treasury more than $100 billion over 10 years, and even more than with the earlier tax cuts, the new tax benefits would overwhelmingly flow to the nation's very wealthiest taxpayers.

With this new tax cut, Bush would be pounding another nail into the coffin of one of the nation's most remarkable achievements of the 1990s — the budget surplus.

Even without a war in Iraq and a new tax cut, we're already committed to deficit spending for the rest of his term. The $5.6 trillion surplus foreseen in the Clinton years is now an unrealized projection.

The lion's share of the disappearing surplus came, over the long term, not from military or homeland defense spending, or from economic stimulus, but from tax cuts.

What's frustrating is that the White House has insisted on squandering this opportunity simply to make the rich richer. Ordinary folks received a $300 tax rebate in 2001. A comparatively few rich folks, however, will be realizing millions as the estate tax is retired.

We had an opportunity, had we chosen to bite the economic bullet for just a few more years, to make life far more secure for our children and our children's children — by using the budget surplus to pay off our national debt.

That goal might have been delayed a year or two by unforeseen events. But the opportunity is gone, chiefly because Bush insists on making the rich richer now.

Meanwhile, state governments are in terrible fiscal shape, which likely portends tax increases — falling most heavily on the poor and the middle class.

Democrats in Congress could constructively oppose new tax cuts and roll back the ones passed last year, in order to curb deficit spending, and institute revenue sharing to help out the states.

But instead, they seem bent on pushing tax cuts of their own. These would benefit lower- and middle-income households instead of the rich, but the nation would benefit more from healthy budgeting than all this talk of stimulus.