Galbraith -- Bush Tax Cuts Will Do a Number on Us

It isn't about the economy. It isn't about meeting the needs of the country. It certainly isn't about managing the federal fisc. No. The new tax cut is about cutting taxes on the rich. Texas-style.

Here in Texas, mother state to George W. Bush, we don't pay state income tax. Our public services ("Mississippi with roads") are financed through sales and property taxes. For the rich, these are very minor burdens.

Bush's new law will give a taste of Texas taxation to the whole country. Tax on dividends will go down to nothing - supposedly for only a few years, but that's a joke. Tax on capital gains will drop to 15 percent. The top rate on the income tax comes down to 35 percent. Add to this the in-progress reduction of the estate tax, and the pattern is clear. It will be great to be American - if you are very rich.
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Just as Lyndon Johnson's Great Society sought to complete Franklin Roosevelt's New Deal, Bush's plan is to finish up Ronald Reagan's first two years. Reagan wanted to take down Social Security at that time - but the Democrats stopped him. And so Reagan turned to other tasks, including patching up the damage of his own first tax cuts. It appears that Bush in 2005 is determined to complete the project of 1981.

Just as New York was the cradle of the New Deal, so Texas today is the model. As governor, Bush already did here what he now plans for the country. He cut taxes irresponsibly, earned his spurs, and then moved on. Now his Republican successors are out on the battlefield, executing the wounded.

That will be our fate, too, as a nation, if we let this tax bill lead to election victory for Bush and the Republicans next year.