Punishing Work

It should come as no surprise that tax cuts remain the centerpiece of Bush's economic agenda. Here is the outline of the his newest proposal:

…the administration plans to push major amendments that would shield interest, dividends and capitals gains from taxation, expand tax breaks for business investment and take other steps intended to simplify the system and encourage economic growth, according to several people who are advising the White House or are familiar with the deliberations.

The changes are meant to be revenue-neutral. To pay for them, the administration is considering eliminating the deduction of state and local taxes on federal income tax returns and scrapping the business tax deduction for employer-provided health insurance, the advisers said.

It is useful to recall how John Edwards talked about Bush's approach to taxation during his presidential campaign. At the time, his "they value wealth, we value work" riff seemed right and smart.

This is a question of values, not taxes. We should cut taxes, but we shouldn’t cut and run from our values when we do. John Kennedy and Ronald Reagan argued for tax cuts as an incentive for people to work harder: Americans work hard, and the government shouldn’t punish them when they do.

This crowd is making a radically different argument. They don’t believe work matters most. They don’t believe in helping working people build wealth. They genuinely believe that the wealth of the wealthy matters most. They are determined to cut taxes on that wealth, year after year, and heap more and more of the burden on people who work.

How do we know this? Because they don’t even try to hide it. The Bush budget proposed tax-free tax shelters for millionaires that are bigger than most Americans’ paychecks for an entire year. And just last week, Bush’s tax guru, Grover Norquist, said their goal is to abolish the capital gains tax, abolish the dividend tax, and let the wealthiest shelter as much as they want tax-free.

So, Bush wants to make almost all investment income tax-free, and to pay for that, he will eliminate an important deduction for working families and repeal a tax incentive that helps companies pay for their workers' health insurance. Valuing wealth while punishing work, indeed. Democrats would be smart to push Edward's message more widely.