Michael J. Thompson Stephen Eric Bronner Wadood Hamad - Logos

Michael J. Thompson
It is interesting to note that the Bush administration openly admits that its
tax cuts favor the wealthy. This is a marked change from even twenty years
ago when the political theorist Philip Green could write that “[s]pecial
advantages for economic élites, as in the United States tax code, are
introduced sub rosa, never proclaimed out loud. No one defends legislation
by suggesting that the better class should be rewarded more and the inferior
class less.” 7 Today, there has been a shift in the political sensitivity to social
inequality and class division.
It is a specific political philosophy, or ideology, that essentially defines the
Bush tax cuts. The Bush administration’s economic argument that the tax
cuts will somehow stimulate a dragging economy and increase employment
has little support in theory and no support empirically. The tax cuts are
proposed as part of a stimulus package, one that will promote economic
growth. But, as James K. Galbraith has recently pointed out, these cuts are
not a growth policy for two crucial reasons: “They are targeted to the
wealthy, and they are back-loaded so as to conceal their true long-term
impact on budget deficits.” 8 The extent of the tax cuts is therefore structured
so that the real effects on the budget will not show up for another ten years or
so since tax cuts on the wealthy will continue to diminish tax revenues and
therefore increasingly bankrupt the state. Of course, this is not obvious when
one examines the tax plan since such easily perceived hardship would cause at
least a small degree of backlash.
It is well-known economic logic that growth could be stimulated by new and
increased government spending, something that has not even been publicly
debated by the Bush administration’s economic policy advisors. This is
because it would put the United States back in a Keynesian policy state of
mind; and this means that there would be legitimacy in refunding the state
and this would give some weight to political interests that want to expand the
welfare state, government programs, regulatory agencies and other things
which would be antithetical to the pro-business mentality and interests of the
neoconservative agenda. In other words, once the state becomes more active
in the economy, there is more likelihood that that state will also be used for
expanding social programs. This runs directly counter to the current trend of
shrinking the state and its influence in both economy and society.
There is also the question of economic growth and job creation. This issue
has been at the core of the Bush administration’s arguments for the tax cuts
Logos 2.3 – Summer 2003