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The Bush Tax Cuts

I disagree with Mr. Bush on a lot, but every time I go to a nice store or do some traveling, I whisper quietly, "Thanks, big guy. You might not be able to string two sentences together, but you know how to help retirees."

Most retirees if they planned well and listened to all the scare stories 30 years ago about how there wouldn't be Social Security by the time we retired, have a nest egg (private investments) a 403-b, or 401-k, or IRAs, annuities, or some other vehicle other than a passbook savings account. Our economy would probably have taken much longer to recover after the bubble burst in early 2000, and then sunk after 9/11 if not for the Bush tax cuts.

But the GAP ("getting all pissed") people are unhappy. GAPists don't care how good I have it or if I worked hard, led a quiet life and saved my pennies; if it's better than someone else, if there is an identifiable gap between my pension and that of a homeless guy who drank away his income, then life isn't fair.

This morning there was a news story (not an editorial) in the Wall St. Journal about the income inequality gap by Greg Ip. This gap is very distressing for liberals (as are health gaps, education gaps, leisure gaps, everything except the marriage gap, which alone can account for a lot of poverty). The 1% wealthiest of all tax filers earned 21.2% of all income [notice the word "earned" because I don't think Ip did]. Now that is a whopping .4% more than in 2000. Yes, it took that long for this "rising inequality" to show up on the graphs, but this causes much hand wringing.

Never mind that much of this gain resulted from technological changes that benefits the smart and well educated more than the less skilled, or that a lot of it is by gains of entertainers, celebs and sports figures, the darlings of the left. And what's really ugly (Ip doesn't use this word)? More than twice as many Wall Street professionals are in the top .5% of all earners than there are executives from non-financial companies. The writer claims that this gap is fueling anxiety among American workers. Are retirees anxious that Wall Street is doing well? Not likely. Our pensions and investments are the silent guest living in our homes--who doesn't eat, make noise, tease the cat, or change the channel--just hands over his paycheck to help with expenses.

Remember the hated Bush tax cuts? The poor got bigger tax cuts than the rich (although for some, something from nothing still results in zero--millions pay no taxes at all). At the bottom, the tax rate fell to 3% from 4.6% under Clinton. At the top the 1% richest folks' tax rate (what they paid) went from 37% under Clinton to 39% under Bush, according to author Greg Ip.

Why are the liberals so unhappy? Seems as though taxes actually fell for the rich despite the tax rate increase. (He includes no information on whether taxes actually fell for the poor--again, it's hard to subtract from zero). So now, the actual gap is widening. With the boomers coming up to the retirement trough, you'd better hope those rich folks keep paying their big taxes because they are covering for the folks at the bottom to say nothing of paying the salaries of armies of government workers.