On tax cuts

by Wm. Robert Johnston
2 June 2003

Dear Editor:

The disconnect between reality and the recent Herald headline, "Many in Brownsville to miss out," was only partly explained by the New York Times byline. There is obviously a serious misunderstanding of the term "tax cut".

Some groups are claiming that low income families with children were left out of the recent tax cut. They were: these families canít get a tax cut because they were not paying taxes in the first place.

Taxes are what you pay the government. A cut is a reduction in what you pay. A tax cut is a reduction in what you pay the government. Since the households referred to in the Herald article do not pay any income taxes, why is it news that a tax cut doesnít include them?

But not only are these families not paying taxes, they are being given money from the IRS above and beyond what they paid in. Called "earned" income tax credits, this is, in principle, welfare distributed by the IRS.

This was left untouched by the tax cut bill. The complaint is that it was not increased. If there really was any expectation of such, it illustrates some real societal ills.

If the issue is still not clear, try this: a merchant sells products to his neighbors, but to some with low incomes he gives products free, out of generosity. Then one day the merchant has a 20% off sale. He is then criticized for not giving more free products to those with low incomes. In fact, one political party tells him to cancel his sale because it unfairly benefits the rich! Does this make sense?

Bear in mind that the change in child tax deductions was additionally withheld from taxpayers with high incomes. This tax reduction was targeted to middle class taxpayers down to the poorest families with any tax liability to refund.

Why do the Democrats condemn working people who want to keep just a little more of the money they worked for, and instead rally on behalf of people who expect more money that was never theirs in the first place?

(printed in The Brownsville Herald 10 June 2003)

© 2003 by Wm. Robert Johnston.
Last modified 17 June 2003.
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