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How To Skin A Rabbit


Little Tommy had just caught a rabbit. On his way home, walking down a dusty road carrying the furry, squirming little creature he tried to console his captured carrot-eater.

“Mistah Rabbit,” he said. “Pretty li’l rabbit, sweet li’l rabbit, why are you wiggling so much. I ain’t gonna do nothin’ but knock you upside your head an’ skin an’ cook ya.”

Attention: my dear rabbit readers, analysts at United for a Fair Economy have just released a new report called “Shifty Tax Cuts: How They Move the Tax Burden off the Rich and onto Everyone Else.”

Here are some of the key findings in the report. (Go to http://FairEconomy.org/ press/2004/ShiftyTaxCuts_pr.html to see the full report).

– For fiscal years 2002-2004, state governments filled approximately $200 billion in budget gaps by raising state taxes and fees and by cutting services. And during those same years, newly enacted federal tax cuts delivered about as much money – $197.3 billion – in new tax breaks for the wealthiest one percent of Americans (households making more than $337,000 a year).

“Had that money instead been directed to state fiscal aid, it could have prevented virtually all recent tax hikes and service cuts at the state level, which fall hardest on low- and middle-income Americans,” write the report’s authors.

– The choice to send nearly $200 billion to the top one percent rather than to state governments underscores just one way the federal tax cuts of 2001 and 2003 are actually “tax shifts,” not tax cuts, for the vast majority of Americans.

– Between 2000 and 2003, the United States saw a federal-to-state tax shift of historic magnitude: the share of the total tax burden borne at the state and local level jumped 15 percent.

“This is the largest such shift in the tax burden since the period 1947-1950. This shift is making the tax system more regressive.”

Amazingly, in 2002, Americans in the bottom 20 percent of households paid 11.4 percent of their income in state and local taxes, while those in the top 1 percent paid only 5.2 percent of their income in state and local taxes – less than half the rate of the poorest fifth.

– Since 1962, the share of total federal receipts collected from the regressive payroll tax, which collects proportionately more from low-income workers than high-income workers, has risen from 17 percent of total receipts to 40 percent – an increase of 135 percent.

Meanwhile, the total share supplied by progressive income and corporate taxes has dropped from 63 percent of total receipts to 52 percent, which is a decline of 17 percent.

– Between 1980 and now, the main tax on wage income – the payroll tax – has jumped 25 percent.

In the same period, top tax rates on investment income and large inheritances have been cut between 31 percent and 79 percent. “Taxes on wealth are falling fast with shrinking taxes on capital gains, dividends and estate taxes.” Oh, it gets better.

– Since 1962, the share of federal revenues contributed by corporations has declined by two-thirds, while the share contributed by individuals has risen 17 percent.

– Current tax policies are fueling the national debt, imposing an average $13,000 in additional debt on each man, woman and child in America between 2002 and 2007 -or more than $52,000 in added debt per family of four.

– During the summer of 2003, millions of parents received $400-per-child checks from the IRS – an advance payment for the expanded federal child tax credit. But, at the same time, many of those same parents saw their local and state taxes increase.

Some will consider this a propaganda piece encouraging class warfare. Call it what you want.

As billionaire Warren Buffet points out, “If class warfare is being waged in America, my class is clearly winning.”

Let them eat rabbit!

ZNet commentator Sean Gonsalves is a Cape Cod Times staff writer and a syndicated columnist. E-mail him at [email protected]

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