In his address to the nation on the eve of the invasion of Iraq, George W. Bush dismissed concerns about the war’s cost by evoking the nation’s proud history: “Americans understand the costs of conflict because we have paid them in the past. War has no certainty, except the certainty of sacrifice.” But neither the war on Iraq, nor September 11, nor the precipitous decline in the nation’s fiscal health has had the slightest effect on the President’s overriding priority–cutting taxes, primarily for the “haves and have mores” that he calls “my base.” The President expresses the nation’s gratitude for those who “have sacrificed in our cause” in Iraq, but at home his clear message is that sacrifice is for suckers.
In fact, Bush is the first President in modern history to lead the country into a major war while calling on the wealthy to pay less in taxes. For World War I and World War II, taxes on the wealth and income of the richest Americans were raised sharply. During Vietnam, Lyndon Johnson put off paying for the war even as inflation began to soar but eventually called for a tax surcharge to help defray the costs.
With the “rollout” of the Iraq war well under way, Bush submitted a budget this year that called for an astounding $1.6 trillion in new tax breaks, heavily skewed to benefit the rich. People making $1 million or more a year are slated to pocket an average annual tax cut of $90,000. He called for permanent repeal of the estate tax on wealth, an acceleration of upper-income tax breaks passed last year and elimination of taxes on dividends, which accrue overwhelmingly to the most affluent. Bush and the Republican chorus defend this shameless giveaway as a “jobs and growth plan” to help get the economy moving. But according to the Administration’s own optimistic figures, the plan will generate fewer than 200,000 jobs in the current year; the economy lost more than that number in February alone. Moreover, the President’s plan may very well cost jobs in the long term as unending deficits drive up interest rates.
Bush kept the costs of the war secret, waiting until the fighting began to ask Congress for a $75 billion down payment, with more to come. And he presented no plan for raising revenues to cover the check. The $75 billion–more like $80 billion by the time Congress gets done with it–is simply to be tacked onto the deficit, now headed toward $400 billion for this year.
One appropriate way to begin paying the tab would be to crack down on corporations deserting the country in a time of trouble. The IRS estimates that US corporations and rich individuals cost the country about $75 billion a year by setting up phony headquarters or residences in offshore tax havens like Bermuda and the Cayman Islands. Majorities in both houses of Congress voted for legislation sponsored by the late Senator Paul Wellstone to bar these companies from bidding on homeland security contracts, but Republicans stripped the measure from the homeland security bill in closed conference. Among the corporate tax haven users have been Harken Energy, which set up an offshore tax dodge while Bush was on its board, and Halliburton, which under Vice President Cheney’s leadership went from nine to at least forty-four offshore tax dodges.
Even the war wasn’t enough to goad the Bush Administration into taking on its tax-dodging allies, nor has the call to sacrifice had any dampening effect on payoffs to party contributors. While American soldiers put their lives on the line, the Administration announced that the first round of contracts to rebuild Iraq after the military destroys it would be limited to a select group of US companies. When the list was published, the Center for Responsive Politics reported that the six companies had contributed $3.6 million to political campaigns over the past two election cycles, two-thirds of it going to Republicans. Or consider the President’s major domestic initiative this year, the brazen prescription drug plan that requires seniors to join an HMO if they want a federally subsidized prescription drug benefit. Unacceptable even to Republican loyalists, this makes sense only as a direct payoff to the drug industry, which fervently opposes the use of Medicare’s buying power to force lower prices on drugs. The President’s plan was a pretty good return on investment for the nearly $20 million the companies spent on Republican candidates last fall.