Democrats miss an economic shift. (Politico).(tax policy)

Economists believe that President Bush's proposed elimination of taxes on dividends will increase stock prices somewhere between 8 and 20 percent. In short, it's good economics. But the proposal is also a political tsunami that will change the politics of the next decade and further solidify the GOP's grip on power.

Before he announced his budget on January 7, the chattering classes predicted that Bush might trim Social Security taxes to help low income workers, accelerate tax rate reductions only for lower income Americans, or trim dividend taxes. But Bush avoided nods to class warfare, and he didn't call for reducing the double taxation of dividends, he said we should abolish it. This was a smarter political move: Abolition is a stand on principle, cutting a tax is tinkering.

Consider this: Repeated efforts to cut the death (or estate) tax have only been successful temporarily. Each time, rates crept up again. But when Congressman Chris Cox argued that income the government had already taxed should not be taxed again, this became a matter of principle rather than special pleading. Legislation to abolish the death tax completely passed Congress in 1999 and in 2000, only to fall to Bill Clinton's veto each time. In 2001, however, President Bush signed legislation phasing out the tax.

Another milestone in the battle came when opponents stopped calling this levy the "estate" tax--which sounds like something that only concerns fox hunters--and gave it the accurate and fatal renaming of "death" tax. A tax that kicks in at death sounds wrong.

Likewise, Bush has already won half the debate when he calls for "ending the double taxation of dividends." ...