Thursday, March 17, 2005

How Many Americans Collect Dividends?

There's been a flurry of stories lately about how government departments have been turning news releases into propaganda for the incumbent administration. It seems to me that they've always done that, though probably not to the extent we've seen in the last couple of years. Particularly since Goebbels, I suppose, governments have been particularly conscious of the value of propaganda.

Today the US Treasury issued a release (http://www.treas.gov/press/releases/js2326.htm) detailing the numbers of taxpayers benefitting from the two rounds of tax cuts we've seen since the UCS took over the White House. According to this release, over 105mm Americans benefitted in one way or another from the tax cuts. The release didn't break out dollar amounts (ie the extent of the benefit for each group), so there's no direct insight into which income groups benefitted by how much. We can probably assume from this omission that the data aren't particularly favorable to those who voted these cuts in.

Almost 94mm benefitted from the new 10% tax bracket. A little over 25mm benefitted from a reduction in the top tax rates. The number of filers benefitting from the elimination of taxes on dividends and reduction in taxes for capital gains amounted to 22m (or about 10% of the adult population).

These tax cuts, of course, are the major reason for our current humongous budget deficit. The treasury press release ended with an exhortation to make the cuts permanent. Coupled with the explosion of pork barrel spending that's been allowed to pass unvetoed, it's hard to avoid the conclusion that they actually want the government to go bankrupt -- this being the best way, presumably, to force a dismantling of the New Deal state. Remember "Rosy Scenario" and "Deficits as far as the eye can see" ? It feels like Reaganomics all over again.

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