- The Washington Times - Friday, January 10, 2003

President Bush yesterday accused Democrats of using "class warfare" to disparage his tax-cut plan.
He said opponents would exclude millions of middle-class taxpayers for being "the wrong people," as charged by Senate Minority Leader Tom Daschle, South Dakota Democrat.
Highlighting his economic-stimulus proposal with a visit to a small flag-manufacturing company in Alexandria, the president said excluding groups of taxpayers because they are more successful or wealthy is inherently unfair.
"You hear a lot of talk in Washington, of course, that this benefits so-and-so or this benefits this, the kind of the class warfare of politics," Mr. Bush said.
"All people who pay taxes should get tax relief. This is a fair plan. It's an important plan and it's a plan that will help people find work."
Mr. Bush Tuesday announced his $674 billion plan, which includes ending double taxation on corporate dividends, speeding tax cuts slated for the coming years and offering more relief to married couples and parents. Since then, Democrats have decried the proposal as favoring the rich.
Mr. Daschle summed up the criticism even before the plan was revealed by saying it would benefit "the wrong people."
Addressing those critics yesterday, the White House vehemently defended the proposal and sought to make the case for Mr. Bush's charge of class warfare.
"It's class warfare to say that there are wrong people in America and these wrong people are not deserving of tax relief," said Bush spokesman Ari Fleischer. "The president doesn't look at the American people and say, 'I'm from the government, I know who the right people are I'm from the government, I know who the wrong people are.'
"The president believes that's a divisive approach and the president seeks an approach that unifies people."
Mr. Fleischer also delivered a tax-code primer to combative reporters in his daily White House briefing, saying critics have mixed up the facts: that as Americans from the bottom of the tax rolls are removed with child credits and income-tax reductions, the burden is increasingly shared by the top.
In 2000, the bottom 60 percent of taxpayers paid 14.8 percent of taxes collected by the federal government. The richest 20 percent, with a mean income of $141,000, paid 65.1 percent, while the second-richest 20 percent, with a top income of nearly $82,000, paid 19.9 percent.
That means households earning more than $81,000 accounted for 85 percent of tax revenues. The top 1 percent which Democrats say will benefit disproportionately from Mr. Bush's proposal paid more than 38 percent of the tax revenue.
"It's inaccurate to say that the benefits will go to the wealthy," Mr. Fleischer said.
For example, he said, a taxpayer who earns $30,000 a year and pays $2,000 in taxes will receive a tax cut of $1,000, or 50 percent. "A thousand dollars to somebody who makes $30,000 a year means all the world to them. It is a huge difference in their life."
On the other hand, taxpayers with $200,000 in income who pay $50,000 "pay far more in income taxes, a point which opponents of the president never make. They pay far more in income taxes than others who earn less," Mr. Fleischer said.
Mr. Bush used yesterday's event to highlight his proposal to businesses like the Alexandria flag company to write off up to $75,000 worth of new technology, machinery or other equipment, a cap that would be indexed to inflation in future years. Businesses now can exempt up to $25,000.
The White House estimates that 23 million small-business owners would receive an average tax cut in 2003 of $2,042 from that provision.
No Democrat has stepped forward to endorse Mr. Bush's plan, and many are taking opportunities to criticize it.
"Never in the field of economics have so few been given so much at the expense of so many," said Sen. Hillary Rodham Clinton, New York Democrat. She said Democrats' calculations show the president's plan would cost almost $900 billion.
Stephen Dinan contributed to this report.

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