TAX CODE by JOHN CASSIDY Tax cuts were just the beginning: the President is signalling a far more radical agenda.
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Even these numbers, though, do not convey the full ambition of the Republicans’ agenda, which potentially involves a historic restructuring of the American system of government. Roughly two-thirds of taxable income is paid to workers in the form of wages and benefits. The other third goes to reward capital, or accumulated savings, in the form of corporate profits, dividends, and interest payments. If Bush’s economic agenda was fully enacted, the vast bulk of these payments wouldn’t be taxed at all, and labor would end up shouldering practically the entire burden of financing the federal government. In a new book, “Neoconomy: George Bush’s Revolutionary Gamble with America’s Future,” Daniel Altman, a former economics reporter for the Times and The Economist, describes what such a system might look like. “The fortunate and growing minority who managed to receive all their income from stocks, bonds and other securities would pay nothing—not a dime—for America’s cancer research, its international diplomacy, its military deterrent, the maintenance of the interstate highway system, the space program or almost anything else the federal government did. . . . Broadly speaking, that fortunate minority would be free-riders.”
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