DIVIDENDS.(analysis of Pres. Bush's tax reduction proposal)

The current Administration likes its initiatives faith-based, and there has never been much secret about which faith constitutes the base. "Christ," Governor George W. Bush replied during a 1999 primary debate, when asked to name his favorite political philosopher. In the ambit of Bush the President, piety is next to godliness. According to a former Bush staffer, Evangelical Christianity is the "predominant creed" at the White House, and a tardy arrival is apt to be greeted with the reproach "Missed you at Bible study."

After the unveiling last Tuesday of Bush's "economic stimulus package," though, one has to wonder, and not for the first time, just which Bible these good people have been studying. It must be some sort of Heavily Revised Nonstandard Version, whose verses are familiar yet subtly different:

He that hath pity upon the rich lendeth unto the LORD; and that which he hath given will pay him again. (Proverbs 19:17), Jesus said unto him, If thou wilt be perfect, go and sell what thou hast, and give to the rich, and thou shalt have treasure in heaven. (Matthew 19:21), For the love of money is the root of all good. (I Timothy 6:10)

The stimulus plan, which the President outlined in a speech to an audience of friendlies at the Economic Club of Chicago, exercises what the Pope might call, if the Pope were a Bush-style Evangelical instead of a Catholic, a preferential option for the rich. It is fully consistent with the economic and fiscal policies that the Administration has pursued from the beginning, which have combined small, cheap, and increasingly feeble gestures toward the bottom four-fifths of the income scale with enormous reductions in the taxes paid by the top tenth, and, especially, by the couple of hundred thousand families with annual incomes greater than a million dollars. Most of the claimed ten-year cost of the new plan--$364 billion out of $674 billion (the real cost is closer to $900 billion, because of interest payments on a higher public debt)--is accounted for by a proposal to make stock dividends tax-free. According to Citizens for Tax Justice, whose computations are generally regarded as reliable, half the cash will flow to the richest one per cent of taxpayers. Another quarter of the benefits will go to the rest of the top five per cent. Wealthy rentiers will thus be freed from the indignity of having to pay ordinary income tax on their dividend income, quite as if it were money that had been earned by the sweat of their brow--as if it were a coal miner's wages or a schoolteacher's salary. Much of the rest of Bush's plan consists of speeding up rate reductions from his 2001 tax cut, which are also overwhelmingly skewed in favor of the affluent.

"These tax reductions will bring real and immediate benefits to middle-income Americans," Bush said in Chicago. "Ninety-two million Americans will keep an average of $1,083 more of their own money." The first of these claims, as the Financial Times editorialized the day after the speech, is "obviously bogus." The second is true, but only in the sense that it is also true that if Bill Gates happened to drop by a homeless shelter where a couple of nuns were serving soup to sixty down-and-outers ...