The Tax Bill & the D's

["Max Sawicky" <sawicky@xxxxxxxxxxxxxxxx>]

For a lot of people, this year's rebate will
be bigger than their tax cut.  $600 bucks.
Yum yum.  I'll take it.

The irrationality of the 'moderates' in both
parties who uphold fiscal responsibility is
grossly manifest.  I'm talking about any Senator
who made a big deal out of voting for a $1.35 trillion
tax cut "instead" of what was reputed to be Bush's
$1.6T package.  They kept the bill within the $1.35
limit by sunsetting the whole thing in 9 years. In
other words, they 'cut' the cost by omitting the 10th
year in the calculations. They did the same thing in
five years with at least one of the smaller provisions.
So clearly the 'moderates' are not motivated by fiscal
discipline or the bond market, but only in protecting
their own sorry asses from Bush voters.

If the budget projections go south (unlikely, in my
view), the sunset does provide an opportunity to
revamp the tax code.  But after 8 years, with most
of the plan phased in, and a few lucky people salivating
over imminent estate tax repeal, obviously changing the
thing in a positive direction will not be easy.

Some credit is due to Olympia Snowe, who successfully
held out for a liberalization of the child tax credit--
making it more refundable for more low-income families.

My project, not that anybody asked, is to
highlight the more-or-less unchanged
problems with the EITC and complexity surrounding the
interaction of the EITC with the child credit, in
contrast to the simplicity of a unified refundable
credit.  I've done a new form for the Cherry-Sawicky
credit that only requires 8 lines.  It fits on a postcard,
and I've printed some up.  Next time I'm on the
tube I'll be waving it around like a madman.

A unified refundable credit is less expensive relative
to the new tax code, since Bush's increase of the
child credit soaks up a good bit of the incremental
cost.  I may buy a pistol, so that the next time
somebody says my proposal "costs too much" I can
whip it out and shoot them.

Bush's expanded credit takes nine years to phase
in, so if the age limit is 17, as for the present
child credit, if your kid(s) are older than ten,
you will never see that thousand bucks (actually
worth less in today's dollars, btw).

My other focus is on the run-up to TANF ("welfare
reform") reauthorization next year.  One job is to
deflate the disinformation about program outcomes,
and a second to monitor the rise of contracting
(small, so far).  The most promising progressive
approach is to push for TANF jobs to be real,
meaning susceptible to labor standards and
unionization.  Note in re: the 'living wage' &
the new child credit that a $15,000 job can get
cash checks for both the EITC and the child credit.
$3,400 from EITC and $750 from the child credit,
tax free.  For a full-time worker, this adds more
than two bucks per hour, after tax.

The Democrats never seriously offered a progressive
alternative tax cut.  That's why they lost, IMO.
The advocates, with the exception of the Childrens
Defense Fund, echoed the Dem leadership's politically
bankrupt (literally, now) fiscal discipline line.

Even worse, they have said if $1.6T is used for a
tax cut, there is no money left for anything else.
So if they get Congress back in 2002, is their
position going to be, there is no money for anything
else?

Given the Dems enthrallment to Wall Street, the difference
in regimes will be in the spheres of judicial appointments
and regulation (which doesn't show up as a budget cost).
Important areas, but ones fundamentally incapable of
moving the U.S. towards social-democracy.  For that you
need big bucks.	

mbs