EIGHTY PER CENT OF ZERO IS ZERO
Mark Steyn on the humbug of the
liberal campaign against George W's tax cuts
New Hampshire THE search for victims of George W. Bush's '$1.6 trillion tax cut for the rich' continues. The other day, New York Times man Timothy Egan went to Montana and turned in a riveting exposé of the Bush plan: 'From the window of her apartment on a hill in Helena,' he began, 'Carrie Villa can see the Sleeping Giant, the mountain formation on the northern horizon that looks just like its name and holds the dream Ms Villa has been nurturing through ten hard years..
Okay, that's enough local colour. What Ms Villa dreams of is a villa of her own up on the mountain. So, when the President swung through the state in March pitching his tax cut, Ms Villa 'took out a calculator and a tax form and did some numbers... . ' Presumably, that dream villa had just gotten a little nearer. Alas, what she discovered was that 'the President's tax cut would not put a single extra dime in her pocket'.
This bit of the story was on the front page, above the fold. If you followed the jump to page 18, you'd find, ten paragraphs in, a passing reference to the fact that Ms Villa, a secretary for a Montana state agency, doesn't pay any federal income tax. It is, in that sense, very difficult for the President to devise an incometax cut that would put a single extra dime in Carrie's pocket. Let's say Bush cuts your taxes by 80 per cent — you may, like Ms Villa, want to get your calculator out for this — well, then, 80 per cent of zero is zero, deduct zero from your total tax burden — zero — and you're left with zero. Suppose Bush increases his tax cut to 99.9 per cent. Well, 99.9 per cent of zero is zip, deduct zip from your total tax burden — nada — and you come out with diddly squat.
Inspired by Carrie's tale, I've been trying to interest the Times in a piece on my friend Bud. Bud makes his living holding up convenience stores and doing a little small-time coke-dealing. He keeps the money in small bills under a false bottom in his E-Z-Boy Recliner. Bud also got his calculator and ran the numbers and was bitterly disappointed to discover that, as he already keeps 100 per cent of his income, the Bush tax cut will put not a single extra dime in his nondescript suitcase.
No doubt the Times stands by its story: it's very hard to benefit from a federal income tax cut if you don't pay any federal income tax, just as it's hard to benefit from a cut in the federal gasoline tax if you're in jail for getting drunk and ploughing into a school bus. It's also true that, if a hurricane devastates Missouri and Bush sends in federal disaster aid, that doesn't put a single extra dime in your pocket if you live in Virginia.
Still, Ms Villa isn't happy about it. 'I'd like a tax cut,' she told the Times chap. 'But, from what I can see, it's not going to change anything for me.' No, indeed. It may sound harsh but, in order to pay less taxes, you have to pay some taxes. But, to the New York Times, the fact that Bush's tax cut only goes to people who pay tax is front-page news. And, when you think about it, it's only going to get worse for him. The more people who, like Carrie, get taken out of federal income tax entirely, the more any tax cut will, by definition, disproportionately benefit the rich. Already, with so many poor and lowincome folks off the federal tax rolls, with 8 per cent of the population paying 60 per cent of the tax bill, it's hard to get a majority in favour of tax cuts — just 48 per cent support it in the most recent poll. But it behoves conservatives at least to try. The tax burden for Americans is lower than in Europe, but federal tax is still higher than it's ever been except for the year 1944, when circumstances were somewhat different. And the trend is only one way. In fact, what was once a sure-fire issue for conservatives has come, in some perverse and unnerving way, to favour the Left.
At the moment Washington is awash with a 'budget surplus' — i.e., it's taking in more money than it needs to fund its programmes. Or, to put it another way, it's overcharging the American people. But the Democratic party and their pals at the Times and other media outlets have been very clever in framing the existence of this vast 'surplus' as a sign of government virtue. To eat into it — by 'giving' money back to the people — would be 'irresponsible'. Bill Clinton was being unusually honest in a speech he gave in 1999 to an audience in Buffalo. 'We could give the tax surplus all back to you,' he said, 'and hope you spend it right.' On the bit about giving it back, the crowd cheered, under the misapprehension that this was one of the president's applause cues. But he motioned them to silence and continued: 'But, if you don't spend it right, here's what's going to happen' — collapse of social-security system, old people dying in the streets, starving kids forced to become crack whores, you name it. The government could let us keep a little more of our money, but we probably wouldn't 'spend it right', because ultimately, let's face it, only the government knows how to spend it 'right'.
So, for some of us, Dubya's modest tax cut is not principally about warding off any impending recession but about nailing this dangerous nostrum. Unfortunately, in their first major vote on his presidency, the Senate voted to slash 20 per cent off the Bush tax cut, reducing it from $1.6 trillion to $1.25 (Bush may yet claw it back). The Senate is supposedly split 50-50, with Dick Cheney's casting vote giving the Republicans control. But this raw number fails to take into account the so-called 'Mod Squad' — 'moderate' bipartisan' Republicans mainly from New England, a handful of mediocrities suddenly endowed with enormous power. Faced with Dubya's tax cut, they chose to exercise it. Jim Jeffords of Vermont and Lincoln Chafee of Rhode Island voted with the Democrats to shrink the Bush plan.
Jeffords is a straightforward fellow: every year, he just puts his vote up for auction. Whether he supports you or not depends on how much dough you'll throw at his pet projects. The Northeast Dairy Compact is one — a relatively cheap and harmless racket by Washington standards, and one which the White House was prepared to string along with. But then Jeffords ratcheted up his demands to include the Idea special education programme. Idea requires school districts to provide 'special ed. for disabled children. On reflection, make that 'disabled' children: it's nothing so obvious as a kid in a wheelchair or with cerebral palsy. A student who's hard to control in class qualifies for the programme. Let's say he's threatened to beat the crap out of the teacher. Under Idea, the school board can get him transferred to an expensive out-ofdistrict placement where he can beat the crap out of another teacher more attuned to his crap-beating needs. As a result, from 4.4 million students a decade ago, the programme now covers 6.4 million. The Feds' share of the cost is about $6 billion per year. Senator Jeffords demanded that President Bush increase it to about $24 billion, and make it an 'entitlement'. That's why I say 'about' $24 billion, because an entitlement programme has no spending cap: its costs rise to cover whoever qualifies and, given that 'reading difficulties' count as a disability, that means potentially every kid in every school district qualifies. The $24 billion is calculated on an annual growth in qualifying children of 1 per cent, but the minute it becomes an entitlement every school board will have an incentive to define whole classes as 'disabled'. The President decided that Senator Jeffords's vote had too high a price tag, and was principled enough to tell him to get lost.
Even worse was Rhode Island Senator Lincoln Chafee. Jeffords at least is for sale; but Chafee, who succeeded to his late father's Senate seat (on this side of the Atlantic, the House of Lords lives on), seems, like many beneficiaries of heredity, not entirely sane. 'I want to be helpful, but I feel strongly about this,' he told Paul Gigot of the Wall Street Journal. He can't be bought, he says. He's opposing Bush's budget on principle, but he refuses to say what the principle is. After slashing the Bush tax cut, Chafee and Jeffords were photographed gleefully celebrating with Senate Democrats. I'm all for 'big tent' Republicanism, but when a guy's trying to take down his own party's new president, in what sense is he a Republican at all?
Jeffords himself seems to have accepted this logic. I've heard dark mutterings from across the Connecticut River in Vermont that he threatened to switch to the Democrats if the GOP leadership attempts to strip him of any of his swanky committee positions. If he did jump, he'd hand control of the Senate to the Democrats, but at least Bush wouldn't have to waste time kissing up to the squishy spendaholic. The excuse is always that, well, he's a Republican senator in a very liberal state, and he's the best the party can hope to do. But Jeffords is well to the left of even the Vermont Republican party. In November the GOP actually defeated the Democrats in hippy-dippy, Ben & Jerrified Vermont and won control of the state house. And they weren't wussy Jeffords types, either, but cranky white males steamed up over the state's approval of 'gay marriage' and restrictions on logging. Needless to say, Jeffords declined to endorse them, or the party's gubernatorial candidate. The guy does nothing for his party, in Vermont or in Washington. It's not even a question of voting against Bush in order to remain politically viable: Jeffords doesn't have to face the voters again until 2006.
`Rinos', they're called: Republicans In Name Only. The justification used to be that, though they weren't social conservatives, they were fiscal conservatives. But my rule of thumb is that Republicans who are relaxed on abortion usually turn out to be relaxed about high taxes and big government, too: that's certainly the way it went with such nominally Republican governors as Bill Weld in Massachusetts and George Pataki in New York. And that's how it's gone with Chafee and Jeffords in the US Senate. Indeed, their votes against Bush's tax cut are the best argument for it. While their official position is that the surplus should be used to reduce the national debt, the President's argument is that if you don't return it to the people it's bound to get spent. That's the Chafee/Jeffords approach. The money they sliced off the tax cut went to new spending, not debt reduction. Another $24 billion a year for special ed? Hey, why not? America already spends more money per child on education than any country in the developed world, and has less to show for it. What's a few more billion here and there? As for the American people, judging from the polls, not only don't they seem to mind paying vast sums in tax, they don't care if most of it's wasted. In a rational world, the tax rate would probably be around 7 per cent. But, in a zany alternative universe where the New York Times is up in arms because someone who doesn't pay taxes isn't getting a tax cut, we might as well expand the 'learning disabled' programme to cover every man, woman and child in the Republic.
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