Jewish World Review Oct. 13, 2004 / 28 Tishrei, 5765
And what tax rate should Americans making over $200,000 a year pay? Some pre-debate advice for the President
President Bush and his campaign are playing rope-a-dope on one of the most
important domestic issues of this election: What tax rate should Americans
making over $200,000 a year pay?
When Kerry criticizes Bush for cutting the taxes of the relatively
affluent, Bush basically dodges. He cites the middle-class tax cuts that
were also part of his plan and the effect increasing top-bracket personal
income tax rates will have on small business. He makes generalized comments
about lower taxes being good for the economy.
But he never directly discusses the issue of tax cuts for those making over
$200,000 a year.
This isn't fair to the voters. This is one of the biggest issues dividing
the two candidates. Voters deserve a straightforward justification from
And it can't be good politics. If only Kerry is participating in this part
of the debate, it's pretty easy for him to win it.
Here's what President Bush should say about this issue:
Here's why I think the tax rates in my plan for Americans making over
$200,000 a year are fair and good for the economy.
The first thing you need to know is that, under my plan, upper-income
Americans are hardly getting off scot-free.
Those making over $312,000 pay a 35 percent marginal tax rate. Those making
between $200,000 and $312,000 pay a 33 percent marginal tax rate.
That means that, under my plan, the federal government takes at least a
third of every additional dollar these families make. I think that's
My opponent wants to raise that to as high as 40 percent. I think that's
It's also important to know that, in my plan, everyone who pays income
taxes got a reduction. The less you make, the greater relief you got as a
percentage of what you owed.
In fact, some on the right, like that crank conservative columnist at the
Arizona Republic, complained that my tax relief plan made the federal
income tax more progressive.
My opponent says that those making more than $200,000 a year should have
been left out of tax relief because they don't "need" the money.
Now, the assumption behind that is that all the money belongs to the
government, which doles it back out based on "need."
I don't think that's the way it ought to work in America. I think people
have a right to keep what they earn.
The government needs to justify taking money away from people. The people
don't need to justify keeping it.
My opponent also says that upper-income Americans should have been excluded
from tax relief because they might not spend all of what they got to keep.
So, what will they do with the money they don't spend? They'll save and
Now, consumer spending is an important part of our economy. But so are
saving and investing.
Investment capital is important, particularly to keeping an economy going
during a recovery.
My opponent's policies are downright hostile to capital investment.
Take the taxation of dividend income, or corporate profits that are
distributed to investors. My plan set a maximum rate of 15 percent on it.
My opponent would raise that to almost 40 percent.
It's important to know that, before dividends reach individual investors,
they have already been taxed as profits at the corporate level at a 35
My opponent needs to explain how the economy is helped by the federal
government taking, combined, more than 60 percent of the profits our
successful companies share with their investors. Because that's what he
Frankly, my opponent is practicing the politics of resentment. He wants you
to resent Americans making over $200,000 a year, and resent me for giving
them some tax relief.
I don't believe you build an economy on resentment.
I believe that all Americans should share in tax relief.
I believe that taking a third of every additional dollar someone makes is
And I believe that saving and investing are important to the future of our
That gives you a rather clear difference, and a clear choice, about leading
this nation and growing this economy.
JWR contributor Robert Robb is a columnist for The Arizona Republic. Comment by clicking here.
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