I am sure that your plan is far better policy and it's good that you and EPI are pushing it in the debate. I noticed that the AFL-CIO is endorsing a number of measures similar to yours, so that's good.
But I still think the Progressive Caucus proposal is brilliant politically and I think that is a great virtue, since derailing Bush's plan is the only way we will eventually end up with the preferred tax structure that progressives may want.
Here is why the PC Caucus plan is so brilliant- because it directly responds to one of the rightwing clever parts of Bush's proposal. Bush is promoting his plan as an "across the board" cut in tax rates, claiming to drop the bottom tax bracket to 10%. Yet the slight of hand is that he only cuts it for the first $600 of income for singles, leaving most single workers with the same marginal tax rate for most of their income. But he does deliver that tax cut for the first $6000 of income, meaning all taxpayers in his plan do get a tax cut.
And how much is that tax cut that for most working singles- well $6000 * a 5% rate cut is - dum, dum- $300. I am sure that the PC Caucus "dividend" is not $300 by accident. This means that all those working single taxpayers will benefit just as much from the PC plan as from Bush's.
As for working families with kids, all but the more well-off families will do far better under the PC Plan, with very poor families getting a tax cut where they would have gotten none under Bush's plan.
Max, you say that it's politically a non-starter to hand out checks to poor people who are not working. Why? At the moment, it may be a nonstarter to hand such checks out ONLY to the poor, but if the middle class is getting their "dividend", they may very well go along with handing it out to the poor as well. Hell, a lot of them go along with handing the tax cuts out to the wealthy as long as they get some themselves.
That is what makes the PC Plan so great- it's a universal entitlement, no means testing, just an equal check for all. And it is redistributive, since the income tax is progressive. If we just took the whole federal income tax and refunded it all on an equal basis, that would be a progressive redistribution of wealth. Spending may be better and more targetted in most cases, but the "dividend" approach is simple, fair and in the present political context, politically very smart.
-- Nathan Newman