Fighting Terror-With a Tax Cut
to Big Business

Posted at <www.commondreams.org>
Published on Thursday, September 20, 2001 in Newsday
Fighting Terror ...With a Tax Cut to Big Business
by Marie Cocco

THE TRAIN is about to steam out of the station. The clearest signal is the
crush of corporate lobbyists elbowing to get aboard.

Since last week's assaults on the United States, division and disdain have
been replaced in Washington by instant comity and agreement to act: to
strike back at the terrorists; to invigorate the exhausted economy.

The notion of a "lockbox" to protect the Social Security trust fund from
politicians who would otherwise spend the retirement money has become as
much an archaeological artifact as the "Saturday Night Live" skits that
ridicule it. The money now is a giant reserve to be tapped for a national
emergency.

No one argues against the necessity; there is universal relief that the
money is there. It is needed to retaliate, and to recover.

We are at war, the president says. Like all wars, this one has come with
profiteers.

The flames had not cooled at the World Trade Center and the Pentagon when
House Republican leaders began circulating a shopping list of tax breaks for
wealthy investors and business. It is to be dressed up as a "stimulus"
package for the moribund economy, paid for from the payroll taxes every
American worker kicks in every week.

This is not, mind you, the same catalog of emergency measures that must be
taken to rebuild New York and the Pentagon, or to keep the staggered airline
industry aloft, or to mount a sustained military and law-enforcement
campaign against terrorism. There is no question these are needed now and
into the future. For these we are happy to pay.

The profiteers' list is altogether different.

The tax breaks for corporations and investors that lobbyists and their
friends on Capitol Hill promote bear a remarkable resemblance to tax breaks
from the Reagan era - some were even enacted then and later repealed. It's
the same list that was pushed on the Bush presidential campaign and,
thankfully, rejected. It is the same one congressional Republicans promoted
a year ago, and two years, and four. The same one that lobbyists hoped would
mark the "second phase" of the Bush tax cut - payback to business for having
supported the first.

The most profoundly silly of the ideas is a cut in capital gains taxes,
promoted as a way to spur new investment. In fact, no study has shown this
connection. But there are plenty that demonstrate that the benefits of such
a cut go to the wealthiest 2 percent of Americans, who hold most of the
assets to which the tax applies.

The people who do the arithmetic for Congress on tax policy always count
capital gains tax cuts as raising revenue in the short term, as people
quickly sell off assets. Perhaps there is someone on Wall Street who has
looked at the ticker this week and concluded that what the market needs is
more sellers. Such a prescription would likely find its promoter stoned with
the smoldering rubble. In Congress, though, they push the idea without
fearing punishment.

There are other investment breaks being bandied about, for faster and more
generous write- offs for new equipment and plants - no matter if the plant
is to be built in Laredo and not Lower Manhattan.

"Clearly the landscape has changed, and it's changed rapidly," said one
lobbyist for an influential business group. "People did not expect there
would be talk of a business tax bill."

So the bar is open. And they unashamedly belly up.

The White House has, so far, shown admirable public resolve in refusing to
endorse anything but relief for the neediest cases. The airlines will get
theirs; the regions that need rebuilding will, too. In private, though, an
administration team is considering a smorgasbord of tax cuts, most on the
lobbyists' lists.

President George W. Bush has discovered of late the importance of
cooperation with the rest of the world. Now is just as good a time for him
to learn that a tax cut is not the economic solution for all seasons. The
spending anticipated for repairing the damage, to put the United States on a
war footing, to bolster airport security in the long term and do the same
for intelligence comes to at least $100 billion, and counting.

This is economic stimulus that is grounded in public purpose, not rank
opportunism.

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