News Release

Bush’s Tax Cuts: Who Benefits?


Blau, a professor of social policy at the State University of New York at Stony Brook, said today: “Bush is marketing a tax policy that redistributes money upward. Earn money as a worker, and you are taxed; make money in the stock market, and you will be taxed less; accumulate enough money, and when you die, your estate will not be taxed at all. The Bush proposal to cut the capital gains and estate taxes thereby illuminates the essential policy bias of the new administration. Instead of ‘compassionate conservatism’ and calls to leave no American behind, we are faced with a proposal that caters to the wealthiest segment of the population.” Blau is author of Illusions of Prosperity: America’s Working Families in an Age of Economic Insecurity.

Frank, an associate professor of economics at Emmanuel College in Boston, said today: “All of the federal budget surpluses over the past three years and most of the projected surpluses over the next few years can be attributed to one source — Social Security payroll taxes. These taxes are particularly burdensome on low and middle income wage earners. Forty-five percent of taxpayers pay more in payroll taxes than they do in federal income taxes. Yet congressional leaders propose to blow the surpluses on cuts in top marginal tax rates, capital gains taxes and inheritance taxes — taxes that fall almost exclusively on the wealthiest 2 percent of U.S. households. If these tax cuts pass, Congress will have succeeded in promoting, via the federal tax code, a massive upward redistribution of incomes — using surplus Social Security and Medicare revenues to finance tax cuts for the very wealthy.”

Kaun, a professor of economics at the University of California at Santa Cruz, said today: “The single most troubling problem facing our nation is the obscene and growing income and wealth disparity, a problem little mentioned during and since the recent election. This growing inequality has been well documented by scholars across the political and ideological spectrum. Despite this, and contrary to the rhetoric, every facet of the Bush tax package would serve not to stimulate the economy and increase investment as advertised, but rather would further aggravate the unfairness that is rife across the nation. The bulk of the income tax cut, and most if not all of the reductions in capital gains and elimination of the inheritance tax go to those least in need. Further, a mindlessly applied capital gains tax would benefit the clever stock investor far more than the creator of new productive investment. With respect to the elimination of the inheritance tax, the ‘mom and pop’ enterprises could easily be made exempt without grossly adding to existing inequality.”

For further information, contact at the Institute for Public Accuracy:
David Zupan (541) 484-9167