Democrats Use Cabinet Officials as Fodder in Tax Fight

Posted May 2, 2003 at 3:53pm

Armed with an advocacy group’s report, a trio of Democratic House Members charged this week that President Bush’s economic proposal puts the rich, including his closest advisers, ahead of the country.

Citizens for Tax Justice analyzed public disclosure forms to conclude that if Bush’s plan to eliminate taxes on shareholder dividends became law, his Cabinet and other senior officials would collectively save $750,000.

Treasury Secretary John Snow topped the list, accounting for more than half of the savings. According to the data, he would reap a $275,000 tax break. Following him are Defense Secretary Donald Rumsfeld at $184,000 and Commerce Secretary Don Evans with $181,000.

“The president’s plan will give these people tax cuts that are larger than the total of what most families earn in a year — this while a worker earning under $46,000 a year will get an average tax cut of $12,” said House Democratic Caucus Chairman Bob Menendez (N.J.).

Menendez joined Reps. Jan Schakowsky (D-Ill.) and Stephanie Tubbs Jones (D-Ohio), as well as the heads of US Action, the American Federation of State, County and Municipal Employees, and Citizens for Tax Justice, in denouncing the administration plan.

“Over the past few weeks, President Bush and his Cabinet have crisscrossed the country in an attempt to promote their irresponsible tax-cut plan,” Jones said. The report “underscores the clear intention of the Republican plan to provide tax breaks for the most fortunate while leaving the majority of hard-working Americans out in the cold.”

Gerald McEntee, president of AFSCME, said Bush’s $726 billion economic stimulus proposal would not help the economy.

“The only growth that I’ve seen is in the bank accounts of his millionaire friends,” McEntee said.

While Snow, the former CSX Corp. chief, tops the list, White House Chief of Staff Andrew Card rounds out the list. He would save $1,500, according to the analysis.

A White House spokesman played down the findings.

“It’s unfortunate [they] chose to focus on a few while ignoring the more than 35 million Americans who will benefit from the elimination of double taxation, 40 percent of whom make $50,000 or less,” the spokesman said.

While Bush and his top advisers continue to press for his full package, events on Capitol Hill make such passage unlikely.

House Ways and Means Chairman Bill Thomas (R-Calif.) floated a compromise plan that, instead of totally eliminating the shareholders tax, would instead reduce the tax rate on dividends to 5 percent. It would also scale the tax rate on capital gains back to 15 percent.

The Senate effectively guaranteed that Bush’s initial plan would be scrapped when Republican leaders cut a deal with moderates that ensures the total tax-cut package would not exceed $350 billion.

The dividend portion of Bush’s plan would cost $396 billion.