A Column By
Native American Studies
University of California, Davis
The Bush income and estate tax cut proposals clearly are not designed to benefit workers, family farmers, Native Americans, Latinos, or African-Americans, very few of whom are in the top 1% in terms of income. But the discussion of cuts does offer us a choice: we can give huge sums of money to the richest 1% of our people, as Bush wishes; but the billions of tax relief given to them has to come out of the rest of the people's pockets. The alternative is to give truly meaningful, BIG tax cuts to the wage-earning and low-income sectors of the society. Giving billions to the rich, as in the Reagan cuts of the 1980's, creates inequities, corrupts politics, drives real estate prices up, and fails to place extra spending power in the hands of those who will really help the consumer economy, namely Native People and other members of the working sector of the population.
Believing in democracy rather than plutocracy, I wish to propose some fundamental principles which might guide the next round of tax "reforms," principles which are geared both towards stimulating the economy and furthering equal opportunity in the society.
First: no individual or family earning below the level of poverty should pay any federal income taxes. The cut-off level, in dollar amount, will vary according to the total income and the number of family members.
Second: a deduction should be given for providing financial aid to needy members of one's own extended family even if they receive less than 50% of their support from the donor and even if they are separately domiciled, provided that the donee's income falls below the poverty level for their household.
Third: all natural persons must be eligible for all of the deductions, write-offs, and privileges extended under current tax laws to corporations, businesses, and wealthy individuals under Schedule C (Business) and elsewhere; in other words, the discrimination against salaried workers and self-employed smallholders must be outlawed.
Fourth: while we need to help taxpayers with dependents, we also need to move towards slower population growth. To do this we need to provide a tax incentive for persons who have had medical procedures to prevent pregnancy, as well as to couples who do not have children. (We are rapidly approaching a population which our environment will not support. Shouldn't we attempt to stabilize that growth?).
Five: a worker should be able to deduct losses from periods of unemployment due to lay-offs, ill-health, and other factors beyond personal control, in the same manner that a corporation may deduct losses from gross income.
Six: small businesses and small farms used to be the backbone of our society but now they are endangered by corporate takeovers of various sectors of the economy. In order to stimulate the successful development of small enterprises, the tax code should exempt the first $25,000 of net income from federal income taxes for all owner-operated unincorporated businesses and farms, including partnerships.
At the present time, wealthy persons through their corporations and businesses are able to deduct from their incomes a wide range of so-called "business expenses" including ocean cruises, lodges in the mountains, box-seats at athletic stadiums, and all costs associated with the production of income. These discriminatory perks have severely distorted the sports industry, the hotel industry, politics, et cetera. Moreover, they are paid for by other taxpayers, which is grossly unfair. To rectify that we could do away with such deductions, but my proposal at this time is to extend all of them to wage-paid workers.
Workers also have to spend money to procure an income, and all of these expenses should be deductible including the expense of transportation with depreciation and mileage for all vehicles used to get to work, costs of tools, baby-sitting and nursery school, uniforms, political donations, expenses of entertaining colleagues, bosses, potential employers, agents, et cetera, expenses of lobbying, professional dues, et cetera, to the full extent that these expenses may be deducted by businesses, with no requirement that the total must constitute a certain percentage of adjusted gross income (as at present).
For instance, many Native People must drive long distances and pay for lodging while engaged in agricultural work. Such expenses should be deducated from earnings in order to calculate net income for tax purposes.
A pro-family tax cut must also allow wage-earners to deduct the help they give to indigent cousins, grandparents, uncles and aunts, sisters and brothers, nieces and nephews, and so on, even if these needy persons have other income. This type of sharing among people needs to be encouraged, not only to help keep people off of the welfare rolls, but in order to improve the quality of life for the neediest sector of our population.
So these are some ideas for Congress and President Bush to consider. Perhaps we can influence their choices!
Professor Jack D. Forbes, Powhatan-Delaware, is the author of RED BLOOD, AFRICANS AND NATIVE AMERICANS, ONLY APPROVED INDIANS and other books. Visit his web page for more information. All rights reserved by Jack D. Forbes. Phone: 530-752-3626/3237 Fax: 530-7527097