Gore Plays Upon Envy to Attack Bush's Tax Plan

0 Comments | Insight on the News, Nov 6, 2000 | by Ralph R. Reiland

Vice President Al Gore's big issue in this campaign, the point he managed to squeeze in seven times during the first presidential debate, is that George W. Bush's tax-cut plan is crafted disproportionately to benefit the rich.

Let's start with two facts. First, we're talking about tax cuts, not welfare, i.e., we're talking about our own money and how much of it the government should subtract from our paychecks. And second, the Congressional Budget Office is projecting that the federal surplus during the next 10 years will total $4.6 trillion.

What the Texas governor is proposing is that one-quarter of that multitrillion-dollar surplus be returned to the taxpayers, to the people who earned it. Along with a proposed doubling of the child tax credit from $500 to $1,000, the Bush plan calls for an across-the-board cut in federal income-tax rates, with the largest-percentage cuts going to those with the lowest incomes. The bottom income-tax rate would be cut by one-third, from 15 to 10 percent. For middle-range incomes, the current three tax rates of 28, 31 and 36 percent would be replaced by two lower rates: 15 and 25 percent. And at the top, the 39.6 percent rate would be dropped to 33 percent.

The problem with all that, if you're a redistributionist like Gore, is that "the rich" get the most dollars, even with the largest-percentage cuts going to the bottom. Under Bush's plan, for instance, a family of four earning $35,000 would get a 100 percent cut in their income tax, saving about $1,500. A family of four earning more money, say $50,000, would get a 50 percent cut in their income tax and save an estimated $2,000. And higher up, a family of four earning $75,000 would get a 25 percent cut in their income tax and see their taxes fall by a projected $2,500.

The Bush tax-cut plan, in other words, produces two immediate results: higher take-home pay for everyone and more after-tax income inequality. It's that second result, of course, that is most displeasing to Gore. The very notion that we simultaneously could have smaller government, be more free, have less central control, be more unequal and yet all be better off is absolute heresy to someone like Gore. And so, in direct opposition, what he's asking us to buy is the idea that we'd be better off with bigger government, more centralization, less individual liberty, smaller paychecks and more equality -- sort of the Havana model of fairness and economic development.

Don't vote to get back $1,500 of your own money, in short, if you think someone else might get back $2,500 or $100,000. This whole argument reminds me of a conversation I had with one of my students a few semesters ago. He and one of his best friends, he explained, were both working in a pizza shop, making close to the minimum wage, when he decided to launch a new business venture. After months of planning, marketing, paperwork, buying insurance, etc., he single-handedly got the business off the ground. In no time, he was making nine and 10 times more per hour than he had made at the old job. With business growing, he asked his friend to come on board as his first employee. That lasted, he explained, only until his friend started to resent their wage gap. Heading back to the pizza shop, he had decided that a place that delivered equal but low pay was better than a place that delivered more money and more inequality.

Purposefully and directly, what Gore is doing is playing on that envy and resentment, setting himself up as the born-again populist who will save us from the "well-connected" and the "wealthiest 1 percent" those mean and nasty folks who would have our school kids standing during class, chairless, and have our old people picking up cans from America's gutters in order to pay for their overpriced pills. It reminds me of those days when the Soviet TV producers would send their film crews to Manhattan to make movies of homeless people eating out of dumpsters. Trust statism, they said, or this could happen to you.

It's an ugly picture that Gore is trying to paint, looking each day for another victim. It's the picture of his mother-in-law, paying more for pills than his dog, a picture of America the Awful, in need of a statist savior with all the answers.

Michael Novak, a winner of the Templeton Prize for Religion, got it exactly right recently in the National Review: "If Al Gore ever gets a campaign bus, he should name it The Resentment Special. He is trying to erect his presidency on the shameful act of teaching resentment of `the rich and powerful' to `working families' This resentment is the terrible fuel behind the one vice that has destroyed all previous republics -- not hatred, not violence, not luxury, not even moral decline, but envy."

Ralph R. Reiland, coauthor of Mom & Pop vs. the Dreambusters: The Small Business Revolt Against Big Government, is an associate professor of economics at Robert Morris College in Pittsburgh.