A Bush tax cut
Ever since the President announced his plan Tuesday for a big old Texas-sized tax cut, dear readers, I have heard your questions, and having slept through some of the finest economics classes our state regent university system ever created, I am here to help. Ask away.
* Dear Dana - Call me crazy, but won't this tax cut ruin the federal budget?
- Albert in Alta
Al, let me put it to you like this. Yeah, it will destroy the U.S. government as we know it. But on the bright side, I'll be able to afford the big bag of Cool Ranch Doritos in fiscal '03-04. The Bush plan figures out to lose the government about $900 billion in the next decade, enough to create a deficit our grandchildren's great-grandchildren may still be paying off.
* Yo, Dana - So, um, why?
- Newt in Newell
Well, pal, do the math. More than 1.2 million jobs have been lost since Bush took office. This tax cut takes effect for 2004 and will make things look awful rosy - at least temporarily - about 21 months from now. Hey, that's just when Bush will be up for re-election! What a coincidence...
* Hey, Dana, is it true what I hear about the Bush plan helping mainly the rich?
- Sue in Sioux Rapids
Suze, multi-millionaires need love, too. Under the Bush plan, the average family making under $10,000 saves a whopping $5 a year on their 10-40A, while they do $234 better under a Democrat proposal. The poor ragamuffin who makes only $999,999, gets just a weak $17,605 break from the prez. But the second you hit the million-dollar mark (in other words, J-Lo, an Iowa or Iowa State basketball coach or a plumber working on my bathroom) the gravy train starts to roll. Under the Bush plan the million-dollar-baby gets a break of $88,873, compared to the $515 the Democrat plan gives them. Guess where the rich folk will be investing their campaign cash?
* Aloha, Dana - But what about me? I'm a single girl who delivers pizzas for a living. Don't I deserve a break?
- Trudy in Truesdale
First of all Trudy, I'll take a medium veggie with extra cheese. Second, no break. The president despises single people. Under the Bush plan, for example, the single person earning $40 grand will pay almost $4,700 in taxes. The married couple with the same income pays $2,850. The married couple with two kids pays $28. Yep, you read that right. A bigger child tax credit and some make-good goodies for all those years of "marriage penalty" make it a bonanza for the Married With Children moderate income set. Get yourself a husband, even if he's 90. It worked for Anna Nicole Smith. Rent some kids. And get rolling with my pie, sweetie.
* Dana Dude, Who makes out best in this deal?
- Uncle Grover in Ida Grove
I'll sing you that answer. "Ittttttt's beginning to look a lot like corporate Christmas, everywhere you go..." The elimination of the levy on corporate dividends alone is worth $364 billion in the next 10 years, rapture to poor little Bill Gates' ears.
* Dear Dana, What are the chances this gets passed?
- Lila in Lakeside
Oh, so-so, Lila. The country needs some economic kick in the pants. The House is in Republican hands and may well back Bush. The Senate will haggle it to pieces, which is what the Senate does. In the end there will probably be a somewhat less adventuresome compromise deal by next summer some time. If it works, Bush is the hero, if it doesn't, he'll claim his big original plan would have saved the economy.
Thanks everybody, next week I'll attempt to explain what Ozzy Osbourne is saying...