KERRY TAX PLAN: "THEM" VERSUS "US"
October 11, 2004
A key element of the John Kerry-John Edwards campaign is an us-versus-them theme -- where "us" are the poor and middle class and "them" are the greedy rich -- famously characterized by Edwards as "Two Americas." The Democrats' message clearly implies that the rest of us would somehow be better off if the rich were worse off, says Bruce Bartlett.
Kerry has proposed eliminating the 2003 tax cuts on "the rich," that is, everyone earning more than $200,000. The reality is that few Americans likely would classify those making $200,000 per year as "rich," says Bartlett.
Meanwhile, Kerry promotes his plan to eliminate tax cuts for everyone earning more than $200,000 as taxing those who can "afford it," these cuts will predominantly affect small businesses:
- Some 90 percent of businesses pay taxes through the individual income tax, not the corporate income tax.
- Under Sen. Kerry's plan, small businesses would pay a higher tax rate than corporations; the top tax rate for corporations would drop from 35 percent to 33.25 percent while the top rate for small businesses would increase from 35 percent to 39.6 percent.
Small businesses create seven out of every 10 new jobs and account for more than half our economy's output. Kerry's plan to increase taxes on the "wealthy" would affect nearly 1 million small businesses and entrepreneurs who are in the top two individual income tax brackets.
"The rich" already have two strikes against them, says Bartlett. Their total share of income taxes has risen over the past two decades -- regardless of tax cuts -- and the stock market collapse hit them the hardest. Do they deserve to have their taxes raised on top of that?
Source: Bruce Bartlett, "Kerry Tax Plan: 'Them' versus 'Us,'" Brief Analysis No. 487, National Center for Policy Analysis, October 8, 2004.
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