BACK • 
Let's Clear the Air
So, the president thinks the economy needs a 1.6 trillion-dollar tax cut. Fed Chairman Alan Greenspan has signed on to that idea. He has assured Congress that deficit reduction and tax cutting can coexist because of the tremendous surpluses being projected for our economy over the next ten years. The Congressional Budget Office has recently upped its estimate to 5.2. trillion dollars in surplus between now and the end of this decade, if all things remain equal-which, admittedly, they won't-but as the Fed Chairman said recently, as inaccurate as the forecasts are likely to be, you have to make forecasts in order to have a plan. Otherwise you just have nothing.
So let's get back to basics and clear the air, and get rid of some foolishness that is being sold to Americans by those in Washington who want to retain all the money and all the power for their own interests rather than letting "we the people" get a little bit of our own money back.
That's right, surpluses are our money. They are nothing more than overtaxation. Don't let anyone confuse you about that. It certainly isn't about Washington's frugality-it doesn't exist. But now comes one of the great class struggle dodges of all time by those in Washington who don't want to give any of our money back. They say, unlike the president's proposal which the Fed Chairman said was the fairest and best way to help the economy, that across the board tax cuts are unfair because the rich people wind up with all the money. The simple answer is, of course they do! Because it was their money in the first place, their taxes in the first place, so in any plan even remotely fair, they are going to get back most of the refunds.
Look, here are the figures: The people earning $30,000 or less pay .3% of all the taxes collected in this country. The people who earn $30,000 to $50,000 a year pay 7.6% of all the taxes collected. The people who earn $100,000 a year contribute 25.7% of all the taxes collected, and guess what? The people who earn $100,0000 or more a year pay 66.8% of all the taxes. Since they pay more than 2/3 of all the taxes collected, in any reasonable tax cut, they are going to get the lion's share of the money back. There is nothing mystical about this. It's pure math, and it's straightforward. Let's take a simple example to prove the point. If you paid $1 in taxes, and the tax cut gave you back your dollar, you would have 100% return of your money. Your next door neighbor pays $10 in tax, gets $2 back, they are getting a 20% return of their money. The reason they're getting more back is because they paid in 10 times more to begin with. This is really so simple and straightforward I cannot believe that those who love big taxes in Washington have the nerve to stand before the national press and sell this malarkey to the people.
The basic issue still remains; are people qualified to spend their money better than the federal government? The big taxers in Washington will say, "No." They don't trust us. They think we will do foolish things with our money. Who are they, I ask, to make such judgements? Why do they have such a low opinion of us? Why do we tolerate that kind of elitism in our elected officials? Likewise, of course, why is it that a tax cut might be inflationary but if the money stays in Washington and they spend it on all sorts of foolishness and pork barrel projects, that somehow that is prudent, money well spent, and not inflationary at all? The whole thing is flat out ridiculous and doesn't merit discussion, except that some people trying to keep the money in Washington are making it a national issue, and using the class war concept, and others are believing them. At the bottom line, please remember SURPLUSES REPRESENT OVERTAXATION.
(Tom Butenhoff is a First Vice President with J. E. Liss and Company, Inc.
in Milwaukee. The views are his, and not necessarily those of Liss
Financial Services or the Job Connection/Hiring
Network.)