REVENGE OF THE REAGANAUTS

Dick Armey's Economic Revisionism

NEW YORK -- They're baaaaaack!

The same manipulative cynics who brought you the 1987-1994 recession, the $900 toilet seat and a trillion dollars of national debt are trying to revive the '80s -- and you're going to pay the bill.

Led by Republican leader Dick Armey, the House of Representatives passed last Thursday a proposal that would cut taxes by $792 billion over the next 10 years. "The American people are overtaxed and deserve a refund," Armey whined on Saturday. "I look forward to working with members of both parties in the coming weeks to ensure that you get some of your hard-earned money back."

Isn't it funny that the GOP didn't believe that you deserved your hard-earned money in 1997 or 1998? There's something about impending primaries that causes politicians to focus on voters' fiscal health. Make no mistake -- this is all about getting George Quincy Bush into the Oval Office next year, at the expense of paying down a national debt conservatives spent decades warning us would ruin the economy.

Remember how Republicans used to compare government spending with that of a typical American family? Both ought to live within their means, they said. After decades of budget deficits, we have exactly that: a federal government that brings in more money than it pays out in expenses. But instead of dancing around naked in the streets jiggling their lobby-fed male breasts, Republicans now view the government's first profit in ages as some sort of windfall to be doled out to their corporate cronies.

Let's consider the family budget analogy: You've been running up credit card debt. After years of fiscal irresponsibility, you've finally gotten it together. You have positive cash flow. Obviously you ought to pay off those debtors. You'll save tons of money in compound interest payments and be better prepared for the next time the head office in Armenia downsizes your sorry ass. By the same logic, the budget surplus ought to go entirely into paying off the immense national debt, now equal to more than $70,000 for each American family.

Armey claims that we're overtaxed. But income tax rates haven't risen appreciably in years. It's pretty hard to argue -- amid frenzied buying of homes, SUVs and insanely inflated Internet stocks -- that Joe and Jane Public are so squeezed that they need a break on their tax bill to buy groceries. What better time than now, when things are humming, to pay off Reagan's attempt to bankrupt us along with the Soviet Union?

Affordable or not, this tax cut is nothing more than rehashed Reaganism, and remember how badly that turned out. Truly cutting taxes across the board would mean reducing taxes by the same percentage regardless of income bracket. The House plan cuts the tax rate by 10 percent -- and since we still have a progressive tax system wherein people with higher incomes pay at higher rates, that means that rich people get the bigger break, both by percent of income and by net amount.

Moreover, the top capital gains tax rate on investment profits for individuals would drop from 20 to 15 percent -- a net 25 percent tax cut. No one poor owns stocks; most people with 401(k)s leave their jobs before they're ever vested in their company program. It's trickle-down all over again, without bothering with the fiction that the free-spending rich create jobs for the parsimonious poor. (Actually, poor people spend a much higher percentage of their money than do the rich. There are also a lot more of them.)

The centerpiece of this massive giveaway to the all-too-privileged, however, is a proposed reduction of the corporate capital gains tax rate from 35 to 30 percent. That's a net 14 percent reduction at a time when corporate profits are zooming to unbelievable levels; if it goes through you can be sure that CEOs will reward their GOP lapdogs with even more spectacular contributions than before.

As usual, the Democrats are no better than their counterparts. While their counterproposal is somewhat more equitable, it nonetheless accepts the flawed assumption that a tax cut is necessary, politically expedient and affordable.

Either way, it's clear that some sort of tax plan will make it through Congress and to Clinton's fluid-stained desk. The feds will cut some taxes to some people -- and the states and cities will raise them proportionally to make up their shortfalls in federal funding. This is America -- and in America, no one but corporations get a real tax cut.

(Ted Rall, a cartoonist and columnist for Universal Press Syndicate, is author of "Revenge of the Latchkey Kids.")