New York City
There's only one explanation for your mystifying claim, in the July 23/30 "In Fact…" column, that "the rebates, unlike the broader tax cut plan, are progressive; everyone who pays taxes gets virtually the same amount": Space aliens must have kidnapped the Nation editorial board and replaced it with the editorial board of the Wall Street Journal. True, the tax rebates are marginally less regressive than the rest of the Bush tax cut package. But that certainly doesn't make them anything near progressive. First, the rebates are based on federal income taxes only; therefore, countless low-income Americans who pay significant federal payroll taxes, but not income tax, will receive no rebate.
Second, as has been documented by Citizens for Tax Justice, an additional 51 million low-income Americans who do pay federal income taxes will still receive no rebate or only a small one. Twenty-six percent of taxpayers–34 million–will receive no rebate, while another 13 percent–17 million–will receive a rebate of only about half the amount advertised. Thus, we must protest the tax cuts by donating the funds to progressive groups, particularly those that fight the poverty faced every day by the families not receiving rebates. I also endorse your readers' suggestion of donating the money to The Nation, assuming, of course, that the space aliens have returned your editors.
New York City Coalition Against Hunger
The rebates, originally a Democratic idea for dealing with the economic slowdown, give the same $300 to someone with a taxable income of $6,000 as to someone with taxable income of $600,000. That seems pretty progressive to us. We do, however, agree that we shouldn't have said every taxpayer will get virtually the same amount, as there are still many people who fall below the $6,000 level (thanks for providing us with the alien defense). Payroll taxes–which all workers pay to fund Social Security–are separate from income taxes. While justice would indeed lie in giving back some of that money and instead fully funding Social Security by removing the current cap on taxable earnings, at this moment such a proposal would probably only add to the deceitful hype surrounding Social Security privatization.