Upper-Class Tax Cuts, Working-Class Soldiers

Private First Class Jessica Lynch, a truck driver's daughter, joined the Army to get a college education to become a teacher. Nationwide, teachers are being laid off, schools closed and college aid slashed to pay for tax cuts for President Bush, Defense Secretary Rumsfeld and other upper-class Americans.

Never before in wartime, with Americans killed, wounded and captured in the line of duty, have the wealthy lined their pockets with tax breaks. With $1.6 trillion in tax cuts favoring the rich already enacted through 2010, President Bush wants more, costing nearly $2 trillion through 2013 -- including added interest on the swelling national debt, reports the Center on Budget and Policy Priorities.

That $3.6 trillion in combined tax cuts would cover the total 2004-2007 budgets for Veterans, Community and Regional Development, Medicare and Social Security.

Bush would have saved about $44,500 on his 2001 taxes, Bloomberg News calculated, if tax-rate cuts were accelerated and dividend taxes eliminated as proposed. That's more than a typical teacher makes in a year.

Vice President Cheney would have saved $327,000. According to financial disclosure statements, which value assets in broad ranges such as $5 million to $25 million, Cheney is worth between $22 million and $104 million. Defense Secretary Rumsfeld is worth $62 million to $116 million.

For Bush and Cabinet, the road to riches was paved with insider deals and taxpayer subsidies.

Journalist Michael Kelly, killed covering the war in Iraq, wrote last year of how Bush sold his failing oil exploration company to Harken Energy in 1986 for stock and a board seat, and was invited in 1989 "to join a group of investors buying the Texas Rangers baseball team; he does, with an overnight $500,000 loan, obtained on the basis of Harken stock, from a bank with connections to his family. In June 1990, Bush sells 212,000 shares of Harken stock at $4 each, shortly before revelations of a sham transaction force a restatement of profits and drive the stock down... His insider-status (Rangers) investment, which derived from his insider-Harken stock, which derived from his insider status as a Bush son, eventually nets him a decent-sized fortune."

Then-Governor Bush sold his share of the Texas Rangers for $15.4 million in 1998. The taxpayers of Arlington, Texas heavily subsidized the team's -- and Bush's -- rise in value by paying for a new stadium when the Rangers threatened to leave town.

Treasury Secretary John Snow made his treasure as CEO of CSX, a railroad company that earned $934 million in U.S. profits between 1998 and 2001 and got $164 million in tax rebates instead of paying taxes. In the same period, CSX paid Snow $36 million and forgave a $24 million loan. Now Snow, worth $77 million to $295 million, is helping to railroad massive tax changes.

The Bush team wants to remake the tax system so that teachers, truckers and other non-rich Americans pay a bigger share of their incomes -- mostly from paychecks -- than wealthy Americans pay from their incomes, heavily derived from investments.

Taxes have become less progressive as the top 1 percent's share of national wealth and income have increased. The top 1 percent has nearly 40 percent of the nation's wealth, up from 20 percent in 1976. The top 1 percent -- with an average yearly income over $1 million -- had 21 percent of the nation's before-tax income in 2000, according to the IRS, up from 14 percent a decade earlier. In 2001, the top 1 percent paid 25 percent of all federal payroll and income taxes, just a little above their share of national income and way below their share of national wealth.

At the state and local level, the top 1 percent already pays a lower rate than everyone else, reports the Institute on Taxation and Economic Policy. The top 1 percent paid just 5.2 percent of their income in total state and local taxes in 2002, while middle Americans paid 9.6 percent and those with income less than $15,000 paid 11.4 percent -- more than twice the rate of the rich.

Now racked by revenue and budget crises, federal, state and local governments are slashing even the most essential services. The pain has just begun.

Who will rescue Americans left behind as schools, childcare, job programs, community development and public health and safety are devastated by cutbacks -- casualties of tax cuts for the rich?

Holly Sklar is co-author of "Raise the Floor: Wages and Policies That Work for All Of Us".

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