2.The Bush Tax Cut Scam
By Todd Andrew Barnett

Special to The Libertarian Enterprise    

Conservatives who, in both Houses of the Congress, passed President Bush's
$350 billion tax cut package might as well rest on their laurels. The
water-downed tax cut package, which Bush has just signed into law, is
purported to give $330 billion in tax relief to families, businesses, and
investors, with an additional $20 billion going to debt-ridden states. One
key provision of the new law also includes $10 billion "in
refunds" being handed over to low-income earners with children.

As soon as Congress passed the legislation, the president praised it,
saying, "By leaving American families with more to spend, more to save
and more to invest, these reforms will help boost the nation's economy and
create jobs." Then he says, "When people have extra take-home
pay, there's greater demand for goods and services. And employers will need
more workers to meet that demand."

The truth of the matter is - the "big" tax cut that Bush and his
ilk have touted is nothing more than a scam aimed directly at the American
people. How is this so? Here's a simple explanation.

The newly-passed tax cut is actually a clever vehicle used by the Bush
administration to use demagoguery in order to purchase votes from the
voters and to bolster Bush's prospects for re-election to the presidency
while he shrouds the true purpose of the so-called "tax cut": to
pillage the American people of their earnings via the devaluation of their
currency.

It's no secret that the Republicans, like their Democratic counterparts,
are inebriated with their perverse, morally-bankrupt urge to proceed with
their out-of-control federal spending. After all, if a Democratic president
were in office, would anything have been truly different? No, of course
not! However, in this case, Bush's out-of-control federal spending makes
the typical "tax-and-spend" liberal Democrat look like a
conservative in drag.

It's also no secret that Bush, with the aid of Congress, boosted the
national debt ceiling from $6.4 trillion to almost $7.4 trillion by a
record $984 billion. The ceiling, by the way, is supposed to be a
"limit" on how much debt Congress can legally incur. However, as
recently evidenced by the actions of the members of Congress and President
Bush, the debt limit is subject to change and can be raised at any time. As
of now, the "limit" runs over $6 trillion. Considering that is
the case, what is the point of the "limit" if
Congress can continue to hike the "limit" every time the debt
exceeds its "limit?"

The debt, in case one hasn't noticed, has already surpassed $300 billion,
although some observers and pundits are already predicting that it will
reach the $500 billion mark by year's end. Adding insult to injury, the
fact that the U.S. dollar continues to plummet against the Euro by almost
30 percent within the last 12 months does not concern a majority of
Americans.

Bush, of course, is now claiming that the currency is "devalued by the
market," which is an outright lie. It's even a contradiction to his
policy. The real culprit behind the devaluation is the pillaging and
looting of the American people by taxing them indirectly.

Let me explain how this works: let's assume that Congress has a budget of
$200 million. Let's also assume that the government was spending $100
million and the IRS was collecting $100 million in taxes. One would notice
that a debt has not been incurred. But let's change that. Suppose that
Congress doubles the spending to $200 million, but cuts income taxes to $50
million.

"Holy cow!" says John Q, the average citizen. "That's
outstanding! That sounds like a great tax cut! I hope our wonderful
president comes through for us! We ought to thank our politicians by
re-electing them, because they gave us a great tax cut. Because of this,
we'll have more jobs and more money to spend. Thanks to them, we've got
more prosperity than we have ever dared to dream!"

What happens is that the government, thanks to the printing presses of the
U.S. Treasury, must spend $150 million to print more money than it needs,
thereby artificially increasing the money supply. In order to accomplish
this, Congress must either raise taxes (directly or indirectly), print more
bills to make direct payments, or to borrow funds. Either way, the
government has to come up with the money to make up the difference.
Nevertheless, given the "tax,
borrow, and spend" track record of both Houses of the Congress, the
leviathan would be happy to do all three. Thus, the costs are passed onto
the taxpayers - whether or not they asked for them.

Because of the $150 million spending deficit and the inflated supply of
printed money, the value of the dollar deteriorates. Unfortunately, the
media refuses to acknowledge this, and nearly all Americans remain naïve
and ignorant about this scheme.

Another brilliant aspect of the tax cut scam is the recent scheme by
Congress to hit Americans who live abroad (that is, outside of the United
States) with over 30 tax hikes. According to the May 9th edition of the
Washington Post, Senate Finance Committee Chairman Charles E. Grassley of
Iowa and fellow Senate Republicans on the committee "broke from their
no-new-taxes orthodoxy to propose tax increases on Americans living abroad,
companies sheltering income overseas and others." The Post reported
that they "approved more than
30 tax increases or other revenue raisers to help fund their tax cuts in
other areas, including dividends." This was done to help offset the
loss of federal revenues from Bush's tax cut, just so that Americans would
have no reason to accuse the president of breaking his "So help me
God" promise not to hike taxes.

The real problem here is not the taxes as much as it is federal spending.
In order to provide real tax relief, you need to cut - preferably repeal -
all taxes on income and all other taxes not on income and to cut all
federal spending significantly.

A real tax cut plan, if authored and passed, would have been of the following:

o  A constitutional amendment calling for the repeal of the 16th Amendment
to the Constitution
o  A repeal of the federal income tax
o  A repeal of the Social Security and Medicare taxes
o  A repeal of the tax on dividends and earnings
o  A repeal of the corporate income tax
o  A repeal of the marriage penalty tax
o  A repeal of the gift tax
o  A repeal of the estate tax (also known as the death tax)
o  A repeal of all and any taxes on cigarettes, alcohol, and gasoline
o  An end to unconstitutional federal spending across the board
o  A significant cut on constitutional federal spending across the board
o  A constitutional amendment requiring a balanced budget
o  A constitutional amendment requiring a 2/3 supermajority to increase spending
o  A constitutional amendment requiring a 2/3 supermajority to increase all
and any taxes on income
o  A constitutional amendment calling for the repeal of the 17th Amendment
o  An elimination of all unconstitutional federal departments and agencies,
except for the U.S. Department of Defense and the U.S. Department of
Justice

How would the federal government be funded? It would be done so through
user fees and other voluntary methods of financing - not via tariffs,
excise taxes, a sales tax, or even a flat tax.

Overall, the Bush tax cut is a sham. It's only a cosmetic change of the tax
system, which maintains the statist system of winners for the favored and
losers for those who don't benefit directly from it. This new tax cut not
only flies in the face of taxpayers, but also perverts and corrupts the
American Dream, as we know it.

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