Trickle-down revisited: Is this what Md. wants?

August 08, 2004|By C. Fraser Smith

WE'RE HEADED into the fuzzy-math season again, but some numbers are moving into sharper focus.

The massive tax relief engineered by President Bush returns an average of $60,713 to the top 1 percent of Maryland taxpayers, according to a recent state-by-state analysis.

The middle 20 percent of tax filers, those with incomes around $43,000, will get an average of $1,026 this year, according to Citizens for Tax Justice, a nonpartisan, foundation-supported group based in Washington.

The whopping cuts for the wealthy are not altogether surprising since the relief has been targeted at high-income taxpayers who theoretically would funnel the money into job-producing enterprises.

This year's presidential election almost certainly will give us a reconsideration of this aspect of the Bush record. Has the relief been fairly and wisely distributed? What public policy goals have been reached? Whose boat has it floated?

Mr. Bush and his Democratic opponent, John Kerry, will battle specifically over how best to use the $861 billion in relief flowing to the top 2 percent of American taxpayers over the length of the president's program. Mr. Kerry has said he would keep whatever benefits flow to the other 99 percent in place.

The president says what looks grossly unbalanced actually restores economic equilibrium. It must be continued if the nation is to sustain an economic rebound, he says. That assertion, too, will be challenged.

Mr. Kerry wants to hang onto the money - repeal 1 percent or 2 percent of the tax cut - and use it to provide health care coverage and to finance more of Mr. Bush's No Child Left Behind education program. Just how much the Democrat can do with this money will be part of the debate. But he says American society cannot survive further polarization of wealth exacerbated by this tax reduction.

The "who benefits and by how much" questions are interesting to contemplate in Maryland, one of the nation's wealthiest states. It's still 2-1 Democratic in voter registration and widely assumed to be irrevocably blue, or Democratic, in the presidential race. Will the president's tax program result in any more Maryland support for the GOP?

Not according to recent polls.

Somewhat less flush than the 1 percenters, Marylanders with incomes averaging over $181,000 - the top 20 percent - will get an average of $7,351 in relief this year, according to the report.

Those at the $11,000 level, the lowest income group measured, will get an average of $164. The lowest 60 percent of Marylanders will get relief of $624, on average.

Mr. Bush says taxpayers will get an average nationally of $1,126 in tax relief. But averages must be carefully considered: This one looks better because those taxpayers who are getting the big bucks bring it up.

These numbers are not entirely new or surprising. Voters knew the shape of the Bush plan four years ago. Al Gore, the Democratic nominee then, had command of the data. But the state-by-state study of the law in practice shows more concretely who gets the relief and how much.

Mr. Kerry asks the voters of Maryland and the rest of the nation if they wouldn't rather use the money now going to 1 or 2 percent of wealthy taxpayers to provide health insurance for some of the 43 million uninsured Americans.

Mr. Bush says Americans must understand that job growth and income security are generated by the high rollers whose investments create a tide that lifts all boats. Commentators such as former Labor Secretary Robert B. Reich say it doesn't work that way in the new global economy. Investors put their money where it yields the best return, not necessarily in job-producing U.S. companies.

This much seems clear: If you don't have a boat - or a big income - you're likely to be left behind.

C. Fraser Smith is news director for WYPR-FM. His column appears Sundays.

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