U.S.: State of the Union address commentary

In last night's state of the union address, U.S. President Bush continued his war mongering rhetoric. But for now, I am going to focus on part of his "domestic agenda" — his proposed tax cuts. In his speech Bush states that it is not "fair" to tax dividends twice:

We should also strengthen the economy by treating investors equally in our tax laws. It's fair to tax a company's profits. It is not fair to again tax the shareholder on the same profits. To boost investor confidence, and to help the nearly 10 million seniors who receive dividend income, I ask you [Congress] to end the unfair double taxation of dividends.

Bush's use of the word "fair" is a rhetorical move to place his pro-business, pro-wealthy, tax policies on moral ground. It implies that the rate of taxation of corporations is a moral issue about what is right and wrong and not a political one. Of course there are moral considerations into how a society distributes its wealth and, when examined critically, Bush's attack on a progressive taxation system carries no moral authority. Instead of asking whether or not it is fair to tax corporate dividends, we should be asking whether or not it is fair that workers surplus value is appropriated by the owners of the means of production.

Related websites:

• Marxists Internet Archive
• An Introduction to Marxist Economic Theory by Ernest Mandel

Related articles:

• Bush's one-sided class war (Socialist Worker, January 31, 2003)
• Excerpts from State of the Union speech regarding Growing the Economy & Creating Jobs (Whitehouse.gov, January 28, 2003)
• Bush Vows That He'll Disarm Iraq and Rebuild U.S. Economy (New York Times, January 29, 2003)

Let the Inspectors Work

Hundreds of thousands of people are expected to participate in anti-war protests during the Martin Luther King Jr. holiday week to commemorate Dr. King's legacyof organizing against war and militarism, racism, poverty and injustice. International ANSWERhas called for mass rallies in Washington, DC and San Francisco.

Move On will be delivering a "Let the Inspections Work" petition next week to Congress and President Bush. You can still sign the petition online.

More information on these and other actions can be found on the websites listed below.

Related websites:

• International ANSWER
• MoveOn.org
• Stop the War (U.K.)
• United For Peace

Related articles:

• Huge protests expected in D.C., S.F (Workers World, January 16, 2003)
  
• Protest Groups Using Updated Tactics to Spread Antiwar Message (New York Times, January 15, 2003)
  
• Thousands in Los Angeles protest war vs. Iraq (World Socialist Web Site, January 14, 2003)
  
• No to Bush’s war machine! (Socialist Worker, January 10, 2003)
  

Class Warfare in American politics

The Bush administration's proposed economic stimulus plan includes the eliminatation of taxes on corporate dividend which, The New York Times reports, "would overwhelmingly benefit the wealthiest 5 percent of taxpayers" (1/8/2002). According to Whitehouse Press Secretary Ari Fleischer, "The President believes that all taxpayers are over-taxed, and we are all in this together. The President does not believe in dividing the American people and playing class warfare" (1/7/2003). In other words, the Bush regime wants to obscure the class nature of their economic "stimulus" plan -- which is an obvious hand-out to the rich.

"Class Warfare" has been a dirty word in the mainstream American political discourse. The right-wing pundits have often been able to silence opposition to cuts to taxes and government services by simply labeling it as "class warfare" with the assumption being that America is above and beyond class politics. But as the divide between rich and poor grows, there is a growing reaction against Bush's proposed tax cuts and a realization that the Bush plan is class warfare on the poor. Democrats -- particularly "New" Democrats -- have traditionally shyed away from class politics. Now is the time for Democrats and progressives to bring class back into the political mainstream and defend egalitarian principals such as progressive taxes against these recent right-wing attacks.

Related articles:

• Economic Plans, commentary by Kevin Phillips (NPR Morning Edition, January 13, 2003)


• A Tax-Cut That Would Sink the Economy (AlterNet, January 13, 2003)


• Many May Not Feel Dividend Plan's Impact for Years (New York Times, January 12, 2003)


• Bush Says Tax Proposal Will Be Fair for All Incomes (New York Times, January 10, 2003)


• Jobless recovery deepens as 2002 closes out (Economic Policy Institute, January 10, 2003)


• U.S. Economy Shows Unexpected Weakness as Jobs Decline (New York Times, January 10, 2003)


• The Bush Tax Sham (The Nation, January 9, 2003)


• Bush Decries 'Class Warfare' Against Tax Plan (Reuters, January 9, 2003)


• Bush’s tax cut plan: The economics of the American plutocracy (World Socialist Web Site, January 8, 2003)


• Government & Economic Stimulus Plan (NPR Morning Edition, January 8, 2003)


• Plan Gives Most Benefits to Wealthy and Families (New York Times, January 8, 2003)


• Mario Cuomo Accuses Bush of Class Warfare (Guardian, January 7, 2003)


• Background Briefing on the Growth and Jobs Plan (Whitehouse Press Secretary Briefings, January 7, 2003)

U.S.: Bush to propose further tax cuts in Economic Stimulus

The Bush administration is gearing up to promote their new "economic stimulus" package to be announced on Tuesday. The New York Times reports that the plan will eliminate a tax on corporate dividends paid to shareholders which amounts to $300 billion loss to the federal budget over 10 years. They hope that the elimination of the corporate dividends tax will result in the return to a booming stock market. In other words, this is a tax cut for the rich. The right-wing proponents of tax-cuts for the rich argue that the benefits will eventually "trickle down" to the rest of us. The idea is that if rich capitalists have more money, they will invest it in the economy which will in turn create jobs. But this is not the most effective way to stimulate the economy and job growth. Capitalist do not invest money to create more jobs. They invest to make more money. In fact this plan to cut taxes will ultimately hurt the working class because it will create a hole in the budget which will most certainly be followed by calls for reductions in government spending. In other words, it will ultimately mean cutting services and benefits to the needy in a time when the government should be doing more to help out.

The proposed tax cut is part of an on-going attack on the working class. The right-wing Republicans, who are often putting liberal Democrats on the defensive for engaging in "class warfare," are effectively doing the same — but on behalf of the wealthy upper-class. Every day on his radio show conservative apologist Rush Limbaugh attacks the notion of a progressive tax system. He does so by distorting facts and obscuring the truth. For instance, he cites IRS statistics stating that the top 50% of wage earners pay 96% of income taxes. This is true but he he doesn't compare it to the share that the top 50% of wage earners share of adjusted gross income (which is 87%). A more useful statistic to look at would be the average tax rate which is 16.86% for the top 50% of wage earners which is not much more than the 15.26% average for all wage earners. What does this mean? It means the U.S. does have a modestly progressive tax system which the right would like to get rid of.

It is time for those on the left to defend progressive ideas and not back down from the class warfare being waged by the American Right. It is time to defend the idea that "from each according to his ability, to each according to his needs...."

Related websites:

• Economic Policy Institute

Related articles:

• Bush to Unveil Economic Plan (National Public Radio, January 7, 2003)
• Bush's Stimulus Plan Would Eliminate Tax on Dividends (New York Times, January 6, 2003)
• Senate Dems Mixed on Bush Economic Plan (Associated Press, January 6, 2003)
• Democrats Pounce on Bush Stimulus Plan (Associated Press, January 4, 2003)
• Generating Jobs and Growth: An economic stimulus plan for 2003 (Economic Policy Institute, December 2002)