Month: September 2004

The “Abolish the Middle Class” Tax Cut

Congress has passed the fourth tax cut bill in as many years under the guise of “tax cuts for the Middle Class”–but there’s very little in the bill to help the middle class, and nothing for the poor.

Two-thirds of the bill’s tax relief will go to the richest 20% of households, according to the Center on Budget and Policy Priorities. Only 10% of the tax relief will help the middle 20% of households. And poor Americans completely lost out this time around: Congress ditched a proposal to preserve child tax refunds for millions of poor families, while simultaneously adding $13 billion in corporate tax cuts to the same bill.

The bill passed both houses with bipartisan support. In the House the vote was 339-65, and in the Senate only three legislators voted against it. In an election year, the Democrats easily caved in to their corporate campaign contributors and warnings from political pundits that a vote against tax cuts would hurt the Democratic party at the polls.

The most disturbing thing about the bill is that Congress chose not to pay up front for the tax cuts. Amendments to close corporate tax loopholes died with little debate. Instead, the bill will add nearly $146 billion to a record budget deficit, predicted to reach $422 billion by the end of this year. As many economists have pointed out, the massive federal budget deficit will eventually have to be paid, and tax increases are the easiest way to do that.

But there are other ways to tackle a budget deficit, and none of them are good for the middle class. For the poor, they are particularly onerous. Consider the Republicans two favorite tactics: cuts in funding for state and local governments and cuts in social spending.

The National League of Cities recently released a survey of financial directors from 288 cities around the nation. The result: 63% of the cities surveyed were having a harder time in 2004 meeting their financial needs than in 2003, and 61% expected the trend to continue through 2005, in spite of stock market increases in 2003 and 2004 and burgeoning corporate profits. Everyone is familiar with state budgets shortfalls around the country–California being merely the worst, but not the only, example.

The post-dotcom recession in 2001, followed by three years of increasing unemployment, have hit state and local governments hard. Since the Reagan years, the federal government has continued to push social and infrastructure spending down from the federal level to the local level without providing any money to pay for these projects. This latest federal tax cut, just like the three prior ones, will not bring the promised economic stimulus that could help bring more employment, higher wages and more tax collections into state and local coffers. States and municipalities will have to increase taxes, thereby negating any “tax relief” impact for middle class and lower class families, particularly in states that don’t have a graduated income tax, but rely instead on regressive sales taxes and property taxes that put a heavier burden on middle and lower income families.

Meanwhile, cuts in social spending will be unavoidable, considering the conservative bias in both political parties for corporate welfare at the expense of social welfare. As Yves Engler pointed out in a recent ZNet commentary, whenever social welfare programs are cut, working people are less likely to press for better wages and benefits at work. If one fears being fired and falling through the increasingly porous social safety net, one is less likely to rock the boat at work, speak out, ask for a raise, protest healthcare cuts, etc. Social spending cuts are a hidden tax on the middle class and the poor, ensuring that wages remain stagnant.

In addition, there’s a systemic problem with deficit spending: interest payments. Anyone who’s had to pay off a mortgage can understand that a $150,000 house paid for over 30 years will cost almost $300,000 when the last mortgage payment is made. The additional amount is accumulated interest. The federal budget deficit will involve massive amounts of interest payments made not to the middle class, not to the working poor, not to the unemployed, but to wealthy investors, financial institutions, and foreign investors in the form of interest payments on US government bonds and notes. The federal deficit figure of $422 billion is only the beginning; it doesn’t reflect years or decades of interest payments, which will come, of course, from middle class and lower class taxpayers.

Enjoy your $1,000-per-child tax credit on April 15th. Try not to think about how much you’re going to pay for it later.

Sources: “House Passes Middle-Class Tax Cuts,” Martin Crutsinger, Associated Press, 9/23/04; “Would Extending the “Middle-Class” Tax Cuts Benefit the Middle Class?” Center on Budget and Policy Priorities, 9/21/04,; “Corporate taxes melting away; Many profitable firms in past 3 years were able to skip paying,” Tom Abate, San Francisco Chronicle, 9/23/04; “Bid to Save Tax Refunds for the Poor Is Blocked,” Jonathan Weisman, Washington Post, 9/23/04; “Forbes List Has Most Billionaires Ever,” Madlen Read, AP, 9/23/04; “US Cities Are Mired in Fiscal Woes,” Ray A. Smith, Wall Street Journal, 9/21/04, see also (National League of Cities) for the full report; “How Do the Bush Tax Cuts Affect YOUR State,” Citizens for Tax Justice,; and “The Social Wage,” Yves Engler, ZNet Commentaries, 9/24/04, see for info on how to receive ZNet Commentaries.

Iraq: We Need a Plan

Last week the media made much of the 1,000th US casualty in Iraq, while trying to explain how impossible it is to identify which of the 20 US soldiers who had died last week was the actual 1,000th, as if it even matters.

In fact, as the Bush administration asserted, the 1,000 mark has little meaning. The true 1,000th mark was passed in July, when the death toll of both US and Coalition soldiers–British, Polish, Italian, Danish, Spanish, Ukrainian, and a host of other countries–is added together, as it should be. Neither the Bush administration, embarrassed by its failures, nor the US press, revealing a general American narcissism and chauvinism, felt the need to report that grim milestone.

Nor was there much attention paid to the increase in frequency of US deaths: 20 in one week takes the average US death rate in Iraq from 2 soldiers per day up to 3 per day. Meanwhile, the media’s superficial narrative moved easily from reporting on the destruction of Najaf to the nightly bombing of Fallujah, but didn’t find a broader reason for it beyond Pentagon reassurances that it was targeting terrorists in specific buildings. In fact, the bombing of targets in Fallujah was clearly in retaliation for the increase in roadside bombing attacks against US troops, including an attack near Fallujah early in the week that killed 7 US Marines and 3 Iraqi security personnel.

Having given up the cities of Fallujah, Ramadi, and Samarra, and nearly all of al-Anbar Province and most of Salahaddin and Diyala Provinces to the guerrillas (which equals nearly half of all Iraqi territory) the US military has fallen back on the Clinton-era policy of running air raids over hostile territory and dropping bombs in heavily populated city blocks based on scanty intelligence. The Bush administration invaded Iraq with the excuse that weapons of mass destruction would be found, but the reality was no match for fantasies constructed by Iraqi exiled informants. Now, as Reuters TV and wire service reporters track down the civilian casualties of US air raids in the hospitals of Fallujah and Tal Afar, history repeats itself.

How long US forces in Iraq can continue to aggressively attack cities and massacre large numbers of women and children in the search for a few so-called “foreign terrorists” is dependent on three things: the discontent of a segment of the US military who feel that they’re not accomplishing anything (indeed, seeing first hand that these tactics are making matters worse, not better), the discontent of the American populace confronting a quagmire in Iraq that will demand an eventual conscription of America’s youth to die for its broken foreign policy, and the misery of the Iraqi people, which will continue to feed the Iraqi guerrilla forces. All of these things are growing stronger, even as the US elite is struggling to find ways to address the mess in Iraq.

Which leads one to ask what can be done to stop this spiral of violence. The Bush administration’s answer is to use the carrot-and-stick approach, consistent with G.W.’s professed admiration of Theodore Roosevelt: beat the living daylights out of the guerrillas (regardless of how many innocents get in the way) and then hope that the survivors will welcome a few reconstruction projects. Nowhere is this more apparent than in Najaf, where the Pentagon met universal dismay over the destruction of Najaf’s old city, its center of commerce and tourism, with fatuous assurances of reconstruction aid, as if buildings, books, and works of art that are over 1,000 year old can be easily replaced.

John Kerry’s vision for Iraq is not much better. He will rely on his nonexistent personal charisma to persuade other nations to join us in the Iraq quagmire–a laughable notion that appears expediently cynical at best and completely disconnected from reality at worst. What’s missing is a true, step-by-step, practical plan.

It’s not difficult to enumerate the problems, and not as hard to list the next steps as the US media often asserts. The first step is to stop attacking Iraqi cities. Period. No loophole in international law allows an occupying power to punish civilians for the battlefield tactics of a nationalist guerrilla movement. To make a pledge to adhere to international law, the Geneva Conventions, and to put that into practice is the most important next step in Iraq.

After that, the US government must stop declaring that the guerrillas are foreign terrorists, recognize them as a predominantly Sunni nationalist force, and begin face-to-face negotiations. The Bush administration, hampered by its ideological hostility to any form of negotiation, is ill suited for this task. Having built their identity and wagered their success on the progress of the war on terrorism, the Bush ideologues will cling forever to a shining lie; hence, the appalling attack on the city of Tal Afar in the mistaken assumption that foreign terrorists are sneaking across the border through Tal Afar to attack Mosul. Indeed, the guerrilla forces are making a bid for Iraq’s third largest city, but they have no need of reinforcements from Syria as long as the US continues to kill their wives and children in Fallujah, Baqubah, Samarra, Ramadi, and dozens of other towns and cities throughout the Sunni triangle.

Of course, negotiations would lead in a direction greatly feared by the Bush administration: towards demands for Sunni political power in Iraq. Democracy is not the goal of the Sunni leadership, not perhaps even the goal of the foot soldiers in the guerrilla army, which some analysts now estimate may exceed 100,000 men. Although many Sunni tribes enjoyed favor under Saddam–just as many Sunnis were oppressed–they all fear becoming the minority group in a nation of Shiites who were all persecuted by Saddam Hussein.

Balancing fears and aspirations, secular and religious priorities, and sectarian differences is a tricky task, and one that the US has taken up elsewhere in the world without complete success. In the Balkans, where whole towns and regions have suffered the uprooting of minority populations and sectarian violence, the US didn’t have to go it alone; it was part of a coalition of nations who sought some kind of solution, however imperfect.

Acknowledging that this is the future of Iraq is necessary, although it reveals how truly foolish the war itself has been: the project of childish men with naive and unattainable goals. But the US must grow up fast if history is to move forward and not repeat itself in an endless, inward spiral of violence.

The Destruction of Najaf

The siege of Najaf is finally over, and what was the result? Hundreds of Iraqis dead, most of them civilians who couldn’t leave their homes.

The US military, because of a deficit of troops on the ground and zero tolerance for US casualties, has a policy of destroying buildings in all-out aerial bombing raids and artillery barrages: if US troops draw fire from a building, it must come down. It doesn’t matter who lives in that building or nearby. Hence, the entire historic, old city of Najaf–hundreds if not thousands of years old–is in ruins and much of the newer city is a blackened hulk. But the Imam Ali Shrine is undamaged! What a victory.

When Arabic satellite TV stations carried the video of Najaf in flames, the leading Iraqi Shiite cleric Ayatollah al-Sistani, who was in London for angioplastic surgery, cut short his treatment and headed back to Iraq, calling on all Shiites to mass together and march unarmed into Najaf to save the holy city. They were a little late. But they managed to save the Imam Ali Shrine, since the US military and the quisling Iraqi government were working themselves into a fervor that would have justified just about any atrocity in order to grab Moqtada al-Sadr.

The Pentagon had insisted that US troops would not raid the shrine, and only Iraqi police and national guard would go in. But after reports that a whole battalion of Iraqi troops threw down their weapons and refused to enter the city, the Pentagon knew it was in trouble.

Then came the news that the whole attack on Najaf was unnecessary, just a whim of the new Marine battalion based in that area. Without consulting either their higher-ups in the US military, the Pentagon, or the US proxy government in Iraq, the Marines decided to push on into Najaf and capture ‘ol Moqtada on their own. It shouldn’t take more than a day or two, they thought. They didn’t count on the Mahdi Army being highly motivated to protect both al-Sadr and the holiest Shiite city in the world.

Well, the Marines got bogged down after 48 continuous hours of fighting in 110-degree heat, so they called Baghdad for reinforcements. It’s only 120 miles from Baghdad to Najaf, so they expected help to come soon. They waited. And waited. It took two days for US army units to navigate through guerrilla controlled territory, dodging rocket-propelled grenades and roadside bombs, in order to reach Najaf. That, more than anything, testifies to how little control the US military and the new quisling government have over the nation of Iraq.

Though unwilling to invade the city, Iraqi police and national guard troops were on alert for anyone trying to enter or leave Najaf. When demonstrators massed in Kufa (a few miles from Najaf) to march on the holy city, Iraqi police opened fire on the unarmed crowd, killing at least 20 people. In addition, mortars (“from an unknown source”) fell on the main mosque in Kufa, killing 27 people and wounding 63. All in all, the Iraqi government and its minions have completely lost any credibility they might have had before this Najaf fiasco.

Moqtada al-Sadr and his militia, meanwhile, are the real winners. In the seige of Najaf, al-Sadr gained something he has never able to obtain before: a face-to-face meeting with Ayatollah al-Sistani, which has given al-Sadr enormous credibility. The peace deal that al-Sistani and al-Sadr struck allows al-Sadr to go free without arrest or trial, and ensures the same for his militia members, many of whom have kept their guns.

Any way you look at it, the US military lost this battle completely and disgracefully. Yet the Bush administration lumbers on, unaware of how much destruction and hate they’re sowing in their wake.

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