Tuesday, September 06, 2005

The Meek Shall Inherit the Earth? Not if Jon Kyl Can Help It.

Frist's office just announced that they're putting off debate and votes on cutting the estate tax this week, given the need to pour money into the Katrina relief effort. But they didn't sound happy about it. And why, exactly, are any Democratic senators supporting cutting the estate tax?

Another headline that doesn't quite capture the point of the column.

GOP TAX CUT MANIA PORTENDS FISCAL DISASTER
East Valley Tribune, Sept. 4, 2005

Sen. Jon Kyl, R-Ariz., hopes to have one of those “only in Washington” reactions to what may be the most extensive, and expensive, natural disaster in American history. With President Bush announcing the largest relief effort in recorded history, with an entire major U.S. city uninhabitable for months, and with the costs of rebuilding not yet known but undoubtedly staggering, Kyl has a plan on how not to pay for it: With a huge estate tax cut to benefit only the top 1.2 percent of taxpayers.

You might think that with the country fighting two land wars in Asia simultaneously and with the recovery effort from Katrina gearing up, a prudent person would hold back, might want to put some money aside, and at the very least would try not to run up more debt. But that’s not Kyl and the Bush administration.

Remember that while the federal government is already projected to run a big deficit, the real numbers will be worse, because of GOP insistence on paying for both wars through so-called supplemental appropriations. This tactic means that budget and deficit projections don’t include the wars’ costs. We know we’re spending some $60 to $80 billion a year for years to come. But you’re allowed, apparently, to strut and loudly refuse to cut and run -- but you never have to explain where the money comes from, or even to account for it.

We also know that disaster relief for Katrina will be an emergency supplemental, also not in the budget, and which therefore will make the deficit picture worse. Nobody has a clue now how much rescue, much less rebuilding, will cost. It’s likely to cost plenty, given that the Bush administration is catching flack over lack of preparedness and slow response, and their customary reaction to criticism is spending a ton of money. It’s will be money that the government doesn’t collect now, and must borrow -- making the deficit picture worse, because of additional interest payments on that new debt.

(For those of you thinking, “let ‘those people’ suffer, they chose to live there” -- remember that, apart from the immorality, folks in Alabama, Mississippi, and Louisiana could say the same about our complaints that the federal government isn’t spending enough to stop illegal immigration. After all, we “chose” to live here, in a border state.)

So what’s the Kyl plan for dealing with a $300 billion deficit that will be made worse by another $100 billion in war and Katrina spending? An estate tax cut costing nearly $1 trillion over 10 years, a huge gift to the wealthiest 1.2 percent.

Unless he’s embarrassed by the pictures of suffering along the Gulf Coast, Kyl hopes to have the Senate vote this week on so-called estate tax “reform,” which would mean huge tax breaks to people inheriting $10 million or more. This “compromise” plan would cut federal revenues by $745 billion over the first ten years -- which money would have to be borrowed, increasing interest payments on the national debt by another $225 billion.

Kyl is using typical Washington-style “fuzzy math” to claim the cost is “only” $290 billion, by including in his 10-year estimate only four actual years of repeal. He massaged the calculation by including in the cost estimate six full years before the cut ever would take effect.

(This accounting trick should sound familiar. It’s how the Bush administration, in addition to lying about the actual numbers, claimed that the new Medicare drug benefit would cost “only” $400 billion. They delayed the program’s start date so there were fewer actual years in the estimate to make the number smaller. Everybody acted really, really surprised when next year’s budget numbers came out, and the cost -- and the deficit -- suddenly jumped. Fool you once, etc.)

We’re at war and watching what may be the largest natural disaster in our history. Unless the pictures of Americans who have lost everything to floodwaters shame him, Jon Kyl thinks we should respond by giving a $745 billion tax cut to the Wal-Mart, Gallo, and Campbell Soup heirs.

It’s called “thinking like an incumbent.”

4 comments:

Scaramouche said...

If there's no 'sticker shock' will the average American pay attention?

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