------------------------- Via Workers World News Service Reprinted from the April 19, 2001 issue of Workers World newspaper ------------------------- TAX CUT FRAUD: IN ONE POCKET AND OUT THE OTHER By G. Dunkel Nobody likes paying taxes. Particularly in the United States, where so much of the public budget is dispensed for the military, for repression--otherwise known as the police and the justice system--and for corporate welfare, and so little is spent on social services and public projects like roads and subways, taxes are despised. George W. Bush tried to take advantage of this feeling by running on a platform of a $1.6 trillion tax cut, even though it was really a promise to his rich backers that he would make them wealthier, come hell or high water. It was the first major proposal Bush made to Congress. The House of Representatives passed it intact at the end of March, but it faced more partisan opposition in the Senate, which is split 50-50 between the two major capitalist parties. On April 7 the Senate passed a commitment to a $1.2 trillion tax cut. Both Democrats and Republicans claimed victory. The week before April 7 over 250 articles were published in major bourgeois papers in the United States covering every maneuver, every nuance of what was called Bush's tax cut bill. Yet very few of these articles pointed out that the bill was not really substantive and did not contain detailed income and spending projections. It was just a congressional wish list that will have to go before a joint House-Senate reconciliation committee, then be voted on again, and finally be signed by the president before it becomes an official wish list. While the Senate's tax cut is 25 percent smaller than Bush's proposal, it did go along with his scheme to apply the cut to all taxpayers, across the board. This sounds fair, but in fact favors the very rich. The administration's own figures claim that families with an income less than $30,000--and the Census Bureau says that over a third of U.S. households fall into that category--will receive an average income tax cut of $264; families with an income between $30,000 and $40,000 will get $616. However, someone making $300,000 a year, according to the accounting firm of Deloite & Touche, would get a break of $12,000. Someone with an income of $1 million would net $46,758. Those standing to inherit a large estate worth more than $1 million will benefit even more from Bush's proposal. What the media have failed to point out is that the cuts in social services that continue to come down cost the workers much more than a couple of hundred dollars a year. The U.S. is near the bottom of the list of industrialized countries in providing adequate public services, which are mainly used by the working class, not by the rich. Because of the tax cut, there will be even more pressure to eliminate all kinds of needed government services. SOCIAL SECURITY TAX There is another tax that has a big impact on U.S. workers, but it wasn't mentioned. It takes a big bite out of workers' paychecks but hardly nicks the rich. It is the Social Security tax. The Social Security tax, called FICA on our pay stubs, goes to pay the old-age benefits of current recipients. Currently, the payroll tax is 12.4 percent for Social Security and 2.9 percent for Medicare, for a total of 15.3 percent, divided equally between employee and employer. A self-employed person pays nearly the whole amount. The Social Security tax is currently capped at $82,000 a year--income above that point is not taxed. Bill Gates pays the same Social Security tax as some hard-working skilled person with two jobs. At least half of U.S. workers pay more in Social Security taxes than they do in income taxes. (Washington Post, June 27, 2000) If the employer's contribution is counted as really coming out of the value created by the worker, then 80 percent of U.S. workers pay more Social Security tax than they do income tax. Bush's tax cut won't have any impact on this major burden for U.S. workers--one that they shoulder willingly because they feel it supports the infirm and elderly. There are many ways this burden could be lightened--such as raising or eliminating the cap, and excluding the first $20,000 of income. That would bring real tax relief to those who need it the most. The only thing most working Americans will get from Bush's generous gift to the rich is a hill of beans. - END - (Copyright Workers World Service: Everyone is permitted to copy and distribute verbatim copies of this document, but changing it is not allowed. For more information contact Workers World, 55 W. 17 St., NY, NY 10011; via e-mail: [EMAIL PROTECTED] For subscription info send message to: [EMAIL PROTECTED] Web: http://www.workers.org) ------------------ This message is sent to you by Workers World News Service. To subscribe, E-mail to: <[EMAIL PROTECTED]> To unsubscribe, E-mail to: <[EMAIL PROTECTED]> To switch to the DIGEST mode, E-mail to <[EMAIL PROTECTED]> Send administrative queries to <[EMAIL PROTECTED]>
