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Is Bush's economic plan geared to the rich?
WASHINGTON (CNN) -- Both the Democratic and Republican parties have unveiled programs to help revive the U.S. economy. President Bush says his economic plan is for everyone, but Democrats say it's just for the rich. Is this class warfare? Who stands to gain the most from proposed tax cuts? Consumer advocate Ralph Nader and former U.S. Rep. Bob Walker, R-Pennsylvania, stepped into the "Crossfire" on Wednesday with hosts Paul Begala and Tucker Carlson to debate the rival economic plans on Capitol Hill. CARLSON: All the rhetoric -- and undoubtedly we're about to hear some more -- about how this tax proposal is a payoff to the rich, I just want to put into perspective the role of the rich in the American economy. I want to read from a recent editorial from the Wall Street Journal. Here what's it says. "In 1999, 553,380 taxpayers -- out of hundreds of millions -- anted up 28 percent of tax revenue. IRS data from 2000 shows that the top 5 percent of taxpayers (those with incomes of $128,000 and higher) paid over half the total tax revenue. Since it's exactly the rich who disproportionately pay most of the income tax, it would be impossible to lower the taxes without benefiting them disproportionately. It's their money." Isn't this fundamentally true? Rich people are the ones who pay. We keep America afloat. NADER: You've got a bad premise here, Tucker. Since the rich people have grabbed off more of the wealth than they deserve by keeping minimum wage low, by preserving all the corporate tax subsidies, handouts, giveaways, all the tax loopholes, now you want to take that unfairness and use it as an argument to reduce their taxes further? I mean, have you ever taken a course in logic? CARLSON: Well, I think, Mr. Nader, it's a different kind of logic. Your logic, if I'm hearing you correctly, is that the entire system, that is the United States of America, is so intrinsically corrupt that rich people, no matter who they are, don't deserve to be rich. That money is by definition stolen. That's what you just said unless I misunderstood you. NADER: You don't deserve to have more power ... CARLSON: No, we're talking about money, not power, sir. NADER: Power leads to money.
CARLSON: OK. But... NADER: No, it's not abstract. If you control Congress through all kinds of campaign money, et cetera, you're going to get Congress to give you all these goodies you don't deserve. Aren't you worried about the 47 million workers in America who work full time who can't earn a living wage? Aren't you worried about ... CARLSON: ... you're still changing the subject and not answering my question. NADER: Well, no, then let's go back to the subject. First of all, all this tax stuff that Bush has put forward is not really designed to lift the burden, it's designed to stimulate the economy. Correct? Why do you have to stimulate the economy when there's huge unused capacity, when there's plenty of capital around, and when interest rates are at historic lows? The issue is to stimulate economic demand. And the way you do that is you start a public works program by paying for it by getting rid of the huge hundreds of billions of corporate welfare that CATO and Heritage and other think tanks have documented and decried. And second, you [increase] the minimum wage. It's $5.15 an hour federal, Tucker. It should be $8 an hour if it was indexed since 1968, the way members of Congress have indexed and (increased) their own salary. BEGALA: Let me get Congressman Walker into this. Let me start with first principles. I do think it's agreed upon that the big problem in the economy is corporate overcapacity right now. Corporations have more capacity than they are able to sell right now. This is why some of them are operating at as little as 75 percent of capacity. That is one out of four of their plants being shut down. Given that, is the best way to stimulate the economy by favoring wealthy investors or middle-class consumers? WALKER: Well, it's by giving money to the investment class. And the investment class includes the wealthy and the middle class, because a lot of the pensions, the college funds that people have socked away at the present time are involved in the stock market. And so it's extremely important to give those investors some payback for the risk that they take. BEGALA: See, this I think is the heart of the argument. And I think you state it well and honestly. Democrats believe the economy is driven by middle-class consumers, and that the way to tap that capacity is to give more money to the master sergeants and maids and ordinary folks who will actually spend it. See, rich people tend to save their money, God bless them. Our folks would tend to spend that money. That would stimulate the economy and make Bill Gates all the richer. What's wrong with that theory? WALKER: But the way in which they get the money to spend is by having a job and having a good job. The way in which they have a good job is to have investment money, risk behind that investment, so that you can, in fact, produce the jobs in this economy so people do have the money to spend. ... This is all about growth and jobs. ... NADER: ... The issue is demand. You got to give those workers more money so they can buy more things. WALKER: And the way you give them more money is to have them have a job. NADER: No. You raise the minimum wage to what it should be adjusted for inflation. WALKER: When you raise the minimum wage, it does not do a thing with the big companies that you keep talking about. It absolutely destroys the small businessman, the little guy who is trying to make a living, that in many cases is not making more than about $20,000 a year himself in profits in his company. ... NADER: It [minimum wage] is $5.15 when it should be $8. WALKER: I think in a stagnant economy that to impose extra costs on small business will simply drive that small business out of the market and will decrease the number of jobs in the country. That, in fact, will drive us more toward recession and depression. And I think small business in this country is the bedrock on which we build the future economy.
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