Editore"s Note
Tilting at Windmills

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April 11, 2005
By: Kevin Drum

TAX CUT POLITICS....By coincidence, there are two consecutive posts on Tapped today about taxes. In the first, Jeffrey Dubner says he was surprised this weekend to learn that his parents had never heard about the Alternative Minimum Tax and were blindsided when it hit them this year. Why haven't Democrats made a bigger deal out of George Bush's inaction on this subject?

The second post is about the estate tax. Republicans are working to permanently repeal it, and Diane Greenhalgh of Moving Ideas tells us that tax fairness groups are fighting to reform the estate tax instead of abolishing it.

So why is George Bush so determined to repeal the estate tax but apparently doesn't give a damn about repealing (or reforming) the AMT, which effectively raises taxes on millions of upper middle class taxpayers?

It's an interesting contrast because it shines a harsh spotlight on the grimier side of tax cut politics. The answer is simple: it's because the upper middle class has less clout than practically any other constituency.

Millionaires, for example, have clout because they have lots of money and influence. There aren't very many of them, but if you promise to reduce their taxes they will reward you with lots and lots of campaign contributions.

Conversely, the working and middle class have clout because they have lots of votes. They are worth wooing not because they have money to give you, but because their votes can make a difference.

The upper middle class, by contrast, has nothing. There aren't enough of them to make it worth chasing their votes, and although they lead comfortable lives, they don't have the kind of money or influence that makes a difference when campaign season starts up.

That's why George Bush and the Republican party don't care about the AMT. Promising to reform the AMT wouldn't buy them very much loyalty and wouldn't translate into a lot of votes either. So what's the point?

And so the AMT continues to get ignored. It's not the biggest deal in the world (for now, anyway), but it's an instructive object lesson in Republican priorities. Unless you're a likely campaign contributor, they don't really care much about your taxes.

UPDATE: More on the same subject from Brad Plumer. And Ted Barlow has some related comments too.

Kevin Drum 6:53 PM Permalink | Trackbacks

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