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Bush's war on the poor 

After an uninterrupted string of victories, President Bush’s magnificent war seems to have turned the corner. If it were not for one small insurgency, 2005 might be the year that he could claim final victory. Not in Iraq. I’m talking about the undeclared war on the middle class and poor. But war nomenclature always gets you in trouble — should it be the Civil War or the War Between the States? This one is more aptly called the War to Unfetter the Rich and the Big Corporations. The president is losing out in the battle to destroy the retirement security of middle-class workers, but look at what else the Republican Congress has done for him on other fronts in three months. Congress passed the Class Action Fairness Act, commonly known as tort reform, which makes it harder for consumers and victims of other corporate abuses to get relief in the courts, partly by shunting suits from state courts to logjammed federal courts where Republican judges predominate. They accomplished it by demonizing trial lawyers and claiming that legislation was needed to restrain not the victims of abuse or neglect but rapacious lawyers who drowned court dockets with frivolous suits by representing them. Overlooked in the debate were the facts. Businesses, not individuals and trial lawyers, are the big users of the courts —20,868 suits by businesses vs. 4,786 filed for individuals in Arkansas in 2001, according to one study — and businesses are far more prone than trial lawyers to be punished by federal courts for frivolous suits. Then Congress whooped through the Bankruptcy Abuse Prevention and Consumer Protection Act, written by credit-card companies and big banks and backed by Bush, which makes it much harder for middle-class people to get a fresh start after filing for bankruptcy. Republicans passed the bill in both houses after defeating amendments that got to the root of the increase in bankruptcy filings. The amendments would have forced lenders to cut fees and expand disclosures to consumers, and curtailed the aggressive marketing tactics of banks and credit card companies and the corrupt bankruptcy practices of corporations like Enron. The object of the bills, the leadership reminded, was families, not corporations. Half of all bankruptcies are the result of catastrophic medical bills and job losses, but the credit card companies and big banks had invested $101 million in federal candidates and political parties in six years, and it was no time for lawmakers to go wobbly on them. Next, the Senate tackled another goal of the president, helping high-income retirees, who had been paying slightly higher taxes since 1993 to stabilize Medicare. The Social Security relief act will significantly raise the take-home benefits of the wealthiest class of beneficiaries, those with incomes greater than $100,000 a year, and speed the bankruptcy of Medicare. Here’s what the bill will do for retirees in Arkansas as soon as the House of Representatives sends it to the president. Arkansans with incomes higher than $100,000 a year will get 37 percent of the increased benefits, those with annual incomes below $40,000 a year none of them. People with incomes higher than $200,000 will receive an average of $2,978 a year. If you earn that much $2,978 is a drop in the bucket, but it’s the gesture that counts. Finally, the House of Representatives last week voted to end the estate tax forever, a major priority of the president. If enacted, it will leave trillions of dollars of income by the richest Americans altogether untaxed and add $1 trillion to the national debt by 2021. The United States has taxed great inheritances for a hundred years but a media consultant came up with the name “death tax” in the 1990s and Americans were persuaded that the pittances they would leave to their widows and children would be confiscated by a new tax. Fewer than 2 percent of estates ever pay any tax and the effective tax rate for estates larger than $20 million was only 16.5 percent for 2003, the last year for which the Internal Revenue Service has figures. That is considerably less than the cumulative tax rate that every working American pays on income they actually earn by their labor. Arkansas’s congressional delegation, all except Rep. Vic Snyder, spouted the same foolishness, that the tax shut down family farms and small businesses and that it amounted to double taxation. Rep. Mike Ross said it was wrong to tax the same income twice, once when it was earned and again by the heirs. But most of the value of large estates, according to the IRS, is unrealized capital gains. If it is not taxed when it is distributed to heirs, it is never taxed at all. But that, after all, is Bush’s major objective, to end taxation altogether on income from investments and to tax only income from labor. Meantime, the House of Representatives moves ahead with the president’s goal of scaling back the earned income tax credit for the working poor and making health care, nutritional aid and energy and housing assistance scarcer. A few more victories and the president can truly claim, “Mission Accomplished.” The White House has already ordered the banners.
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