Bush: We Need More Corporate Tax Cuts (But Don’t Increase Money To Insure Poor Kids)
At a time when President George Bush is threatening to veto a bill enjoying widespread bipartisan support that would increase money to fund health insurance for poor kids he is making it clear he’s no naysayer. He does have something he’s firmly for:
President Bush said yesterday that he is considering a fresh plan to cut tax rates for U.S. corporations to make them more competitive around the world, an initiative that could further inflame a battle with the Democratic Congress over spending and taxes and help define the remainder of his tenure.
Advisers presented Bush with a series of ideas to restructure corporate taxes, possibly eliminating narrowly targeted breaks to pay for a broader, across-the-board rate cut. In an interview with a small group of journalists afterward, Bush said he was “inclined” to send a corporate tax package to Congress, although he expressed uncertainty about its political viability
The president’s comments came as he tried to calm volatile stock and mortgage markets and reassure the country that the economy is fundamentally strong. Despite mounting concern over the downturn in the housing market, he dismissed proposals advanced by prominent Democrats to grant government-chartered Fannie Mae and Freddie Mac more freedom to buy mortgages and mortgage-backed securities. And he ruled out any taxpayer bailout of lenders threatened by the subprime home-loan crisis.
There is a common thread in all this. MORE:
In a 48-minute conversation on an array of economic issues, Bush also warned China not to start a trade war, blamed Congress for not doing more to shore up infrastructure such as the bridge that collapsed in Minneapolis last week, and pushed back against Democratic presidential candidates who are promising to renegotiate the North American Free Trade Agreement
The basic thread is that Bush will simply not work with those who have a “D” in front of their party names. You can almost start copying “boilerplate” sentences from news stories and pasting them into whatever issue comes up. As he winds down his time in office, Bush remains one of the most non-compromising, polarizing Presidents in all of American history. If there’s a choice between consensus and confrontation, he’ll opt for confrontation every time. It’s all power politics.
The good news: there may be enough votes to override any veto on the children’s health care issue. Or will GOPers in the end, as usual, opt for the White House course?
UPDATE: As he beings to plant the seeds for a big push for more corporate tax cuts, it turns out that the President’s people have begun what Bill Scher notes is a “minformation campaign” about his stance on the children’s health care issue and what it does. In other words, the plan is being demonized and misrepresented.
Read his post and check out his links.
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Maybe I’m reading your writing the wrong way, but Bush isn’t threatening to veto the health bill over the money, but rather because he thinks it will “…expand the nationalization of health care…”.
And the proposal isn’t to cover ‘poor poor kids’. they’re already covered, as are, I believe, kids who merely ‘poor’, the proposal is to include the not so poor kids.
The average American is getting screwed twice, by our corporations and our government. Despite rising profits for corporations, their tax rate is at historic lows. And despite the low tax rates and the high profits, the percentage of corporate revenue going to wages is also at a historic low.
So, the average American is having to pay for more than their fair share of the tax burden while not receiving any increased compensation from the corporations they made successful.
On the subject of poor kids and health insurance, here’s a quote from Joe’s first link:
stevesturm,
What’s important is the juxtaposition.
Corporate tax cuts vs. healthcare for children
When you actually read what Bush is saying about restructuring the corporate tax code, he talks about making our corporate tax structure more competitive and it contains bits like this:
Revenue neutral. So how does this relate to not having enough funds to insure kids?
It doesn’t.
So who is doing the misrepresenting and demonizing here?
Maybe this is also a political move. W’s throwing out a big fat juicy steak. W and the Republicans want to cut taxes, the Democrats don’t. We may even see the WSJ laughable Laffer curve to justify the corp tax cut.
C Stanley,
It seems foolish to “craft a revenue-neutral plan” when revenue is so far behind government spending. Or do you think we should keep financing wars with Chinese money while our infrastructure and population grow sickly?
Chris,
At least you’re now admitting that the goal posts need to be moved from “tax cuts” to “revenue neutral”, which are two different things. Cutting rates across the board for corps while cutting out some preferential treatment that some corps get, if it ends up with a neutrality across the board for corp taxes, is a much different thing than cutting taxes for corps in order to reduce the overall amount of revenue that corps pay (as in your earlier argument that the share paid by corps isn’t enough).
If true that the US is second only to Japan in corp tax rates right now, then I don’t see why we shouldn’t look more closely at that. It’s nice to say that corps should pay more if you naively think that you are taking money from fatcats who have plenty to spare. And yes, that is naive since all taxes on corporations are paid ultimately by you, the consumer, and punitive tax rates on corporations ultimately leads to sheltering of corporate revenue or, if that’s not possible then corps relocate overseas and take US jobs with them.
CStanley,
Talk of “revenue neutral” tax policy is great.
The problem however is we’ve heard this before. Over and over actually.
The result? An additional 3 trillion dollars in national debt since taking office (by far a record for any president).
I’m more inclined to observe what the president does, rather than what his aides say he will do. And history has shown this to be a wise move.
Davebo,
I agree with you, and a much more honest criticism of the points made in the article would relate to the part where Bush has now suddenly found his veto pen after six years of rubberstamping the GOP Congress’ budgets.
Its weird. Why the big veto deal over increased funding for kids falling between the healthcare cracks? It sure doesn’t help republicans, it won’t help Bush, the Dems will work this hard come election time. Who benefits?
Subtleties aside, most voters will see this simply as big business first, kids last and everyone else can go kiss my….
I swear, the next eighteen months are going to feel like a goddamn lifetime.
C Stanley–
Are you saying it’s not a tax cut proposal?
I’m with Davebo. I have serious doubts that any Bush-backed corporate tax restructuring will be revenue neutral. But even if it was, I think it’s easy to make a serious case that revenue neutral is not enough given our government’s rate of spending.
But again, this article is about priorities, and it’s clear to see where Bush’s priorities are.
George: I’m arguing that tax restructuring that includes some cuts and some increases but results in neutral revenue is not in any way, shape, or form, taking money from kids who need health insurance. If one wants to argue that we need tax increases or tax restructuring that results in an overall revenue increase in order to afford expansion of programs, that is a different thing altogether.
Truflo: To paraphrase your comment: Why can’t we all agree that the Dems bill to increase healthcare coverage is good by default because Dems are the good guys, and Bush’s tax proposals are bad by default because everyone knows he’s evil? And since he’s now so unpopular that this is what the general public will believe anyway, why should we waste time talking about the details?
C Stanley–
The connection between the two of them is, as Chris says, a matter of what the President’s priorities are.
I don’t see how anyone is moving the goalposts by pointing that out.
George,
If you reread my first response to you (comment #14) you’ll see that I said:
Thus, my position is that honest discussions of priorities are fair game. The goal post shifting came in when the point was being stretched from the idea of not RAISING taxes to the idea that Bush waants to LOWER corporate taxes. And you can’t tell me that you don’t honestly see that people conflating those two things is a reinforcement of stereotypes- “Dems are trying to help the children while GOP only cares about big business interests!”
You can always connect dots as every budget decision is a matter of priorities. The way people choose to connect them reveals their underlying biases though. Funny I haven’t heard anyone crying about how the Dems chose to take money from senior citizens to fund the SCHIP expansion, or that it is diverting money that we need to fix our “crumbling infrastructure”. If you honestly think we need to expand the tax base and cover ALL of thoe things, then be upfront and say so. Personally I think that we could find a lot of waste in the budget to cover many needs, and if that’s not enough then a reasonable tax increase is in order- but not necessarily on corporations since we’re kidding ourselves if we think that those taxes don’t affect working class citizens.
C Stanley–
I am perfectly willing to let everyone reading this thread decide for themselves if I’ve been dishonest.
George: for the record, I don’t see anything that you’ve said that I object to at all. You asked me some pointed questions, and I replied. No harm, no foul there as far as I’m concerned.
C Stan, the two issues are totally separate and merely highlight Bush’s agenda. No one has said we need to raise corporate taxes to pay for the childrens healthcare or that if it gets defeated its because we lowered corporate taxes and now couldn’t afford it. Thats not whats beind said.
What IS being said is Bush doesn’t think 3.2 million children getting insured is important enough to warrant the gov’t doing something about it. At the same time he wants to make a change in corporate taxes thats “Revenue neutral”. If you believe that one I have a bridge to sell you. You call it a stereotype but dammit right now the Dems are trying to help children get insurance while Bush is backing big business instead. Its right there out in the open.
Oh really? That’s not what is implied by the snarky headline of this story?
It’s just as bad or worse to frame Bush’s position in that way. I didn’t think it was right when his administration framed opponents of his Iraq War policy as being unserious about national defense, and I don’t think it’s right for those who want an immigration reform bill to pass to decry members of both parties as “not caring enough” about that issue when they’re unable to come to an agreement and pass legislation on it. Disagreeing with one particular approach to a problem DOES NOT prove a lack of caring about the problem itself, and that absurd breach of logic is one of the main problems in our political discussions and a major cause of bitter partisanship.
C Stanley,
If Bush does care about the problem of the uninsured kids, what’s his suggestion for fixing the problem?
Sigh.
If you read the stories linked by Joe, you’d see that even Republicans in Congress object to the President’s position on funding health care for those poor children.
Yes, George, because those Republicans in Congress would be inclined to stick by George now that his polling is down to record low approval ratings.
Chris,
My complaint that the arguments against Bush here are disingenuous shouldn’t lead you to believe that I agree with him on this issue or anything else. But to answer your question, he did make some proposals in his SOTU about tax credits for private purchase of insurance (which would help the self employed as well as help to delink insurance from employment so that people don’t lose coverage when they change jobs.) I think that’s only a small part of the solution, but I can’t disagree with it either.
He also proposed a much more modest increase in the SCHIP program than what Congress is putting forth. As far as I can tell, the objection to the huge increases makes a good bit of sense: first of all, it’s incorrect to say that the bills in Congress are to cover children when many of the new people added to the eligible group are adults. Second, what’s being proposed is that some states would extend eligibility to families of much higher incomes than before, due to higher cost of living in their states. It seems to me that a state with higher cost of living would also have a higher tax base among its own residents and should be able to fund additional families’ insurance with revenue from their own citizens rather than looking to other states to finance this. I’m not sure what the precedent is with other programs; does anyone know, for example, if TANF funding is indexed to varied cost of living in different states? If not, then why should this be different? If it is, then maybe the Democratic proposal is consistent and I will rethink my position on it. My gut feeling is that we should split the difference so that federal funds make up some of the shortfall for states with greater need but the states pick up half the bill as well.
C Stanley,
My understanding about the flaw in the Bush claims about how our corporations aren’t competitive because of taxes is that the claim is based on the official rate as opposed to what they actually pay once all of the tax breaks they get are accounted for. If the claims of being revenue neutral are based upon this same false claim then it is questionable whether it really will be revenue neutral or not.
I think that sounds like a reasonable objection to what he’s saying Jim and I’ll check it out. Again, my aim is not to support Bush or take everything he says at face value but my complaint is that some people don’t seem to apply that same scrutiny to the Dems in Congress.
I will point out though, that if what you are saying is true, it also seems that Bush wants to close those loopholes that allow some corps to pay less. Making the tax code more transparent and less exploitable seems like a good thing on balance, if that’s what he’s proposing.
I’m actually referring not to loopholes aimed at specific industries or companies, which is what some in the Bush administration are speaking of changing (We’ll see how well that stands up to the pressure that will be brought to bear.) but the broad range of acceptable deductions from taxes that companies claim legitimately but that affect the amount of taxes paid. That was the point I was making in questioning the basis for the claims that we have a competitive disadvantage because of our corporate tax rate.
(We’ll see how well that stands up to the pressure that will be brought to bear.)
Point well taken, Jim- but the way I read it, it seems that the overall reduction in rate that Bush is proposing is the carrot to help overcome the pressure that will inevitably push back against the closing of loopholes. Whether or not it works out that way will remain to be seen.
It seems that what Bush wants is to make corporations more competitive on the world market. While at the same time, health care costs are increasing for everyone. It would seem that the plan for single payer health coverage for all would relieve the health care burden for everyone, especially corporations as this has become one of the largest expenditures for any company trying to cover their employees. Not to mention those millions who do not have coverage, and especially the children. I realize that this is not what the healthcare insurance industry wants, but what has to happen is we reach some sort of agreement so that everyone has coverage, and the “industry” can remain financially solvent.
Another aspect of the corporate tax cut that I saw was the possible loss of deduction for keeping jobs in the U.S. This has major implications, but has been little noticed. Just a thought.