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Trickle Down Is A Tricky Way To Rationalize

Mon., April 10, 1995

The nation again is being asked to believe that tax breaks for the wealthy somehow trickle down to others.

It’s part of the GOP’s “Contract With America.”

Republicans in the U. S. House of Representatives are attempting to justify tax cuts for the rich on the basis that somehow this will help the working class.

Among proposed tax cuts, rollbacks and loopholes for the well-to-do, the most notorious are:

One - a staggering 50 percent cut in the capital gains tax on investments and other forms of non-work income.

And two - a tax exemption of $500 per child for persons who make up to $200,000.

That’s right - $200,000.

Five times the top scale for reporters in this town, who are considered relatively well positioned in the news field. Except in comparison to correspondent Sam Donaldson of ABC and his ilk. More on this below.

A $200,000 income is seven or eight times the average income in Spokane.

And Republicans call this middle class. So where do ordinary working folks come in?

Third class? Fourth? Right along with sheep?

Why would any sensible working person fall for the old trickle-down tax dodge?

A friend, the late Ken McCord, media relations representative for Washington Water Power Co., once tried to sell me on a similar trickle-down concept. It had to do with paychecks his bosses drew from WWP customers and shareholders.

This deeply caring man, who received only a modest salary himself, caught most of the flak for the fat compensation packages of the utility’s corporate elite. He was extra sensitive because the government-regulated private gas and electric company is supposed to operate in the public interest.

Parenthetically, it was reported in this newspaper last week that WWP Chairman Paul Redmond earned $1.4 million last year.

So, anyway, McCord’s theory was that paying the top brass of WWP phenomenal salaries was good for the local economy. And thus, its peons.


As he saw it, big spending by the chairman and president and vice presidents of the regulated private utility was necessary to help prime Spokane’s economic pump.

The more these big spenders shelled out for fancy cars and big boats and luxurious homes and recreational toys and steaks and lobster tails, the more work they created for car repairmen and restaurant waiters and fishermen.

How convenient.

Well, that may shed some light on the trickle-down theory of how tax breaks for the rich help the working class.

Back to Sam Donaldson. The TV news star hauls in 2 million bucks a year from his job as a network journalist, so called. But that’s not the problem. Others with less talent make far more. No matter.

But last week, during an appearance on the CNN talk show Larry King Live, Donaldson gave sincere hard-working journalists a black eye. Under questioning by guest host James Carville, the Democratic spin doctor and mastermind of the Clinton presidential campaign, correspondent Donaldson admitted to taking federal payoffs of $100,000 the past couple years. The money was in the form of subsidies for wool and mohair produced on a ranch he owns in New Mexico.

OK, so he’s a rich dude. And he’s not particular where he picks up an extra hundred thou. Still, no problem.

But then this fierce, hard-nosed, avowed foe of welfare for the rich tried to justify taking a government giveaway of taxpayer money, insisting to Carville that he, Donaldson, the multimillionaire news bulldog, needed the handout to “make a living.”

Carville just beamed.

If only Donaldson were the exception to the rule. But more and more, it seems, national news stories are blatantly misleading.

The GOP tax package enacted Wednesday also rolls back a tax hike on Social Security benefits enacted by Democrats two years ago. Affected are seniors whose yearly income is over $34,000 for singles or $44,000 for couples. Every national report - zero exceptions - has called this a tax cut for wealthy seniors.

Judge for yourself.


The following fields overflowed: SUPCAT = COLUMN - Frank Bartel The Spokesman-Review

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