George Bush promotes his so-called tax cuts by saying that he is just giving the people their own money back. It is the pretty facade he puts on a very ugly policy. A recent study jointly released by the Alaska Center for Public Policy and Citizens for Tax Justice tears down the facade and reveals the true impact of the so called "tax cuts" on Alaskans. You can read more about the study at acpp.info/blog and at www.ctj.org/pdf/debtak.pdf.

     We are living in a time of huge budget deficits, so every dime of the Bush tax cuts adds to the national debt. As a result, the so-called tax cuts do not eliminate any aggregate tax burdens. Instead, they simply defer them to a later time when the debt must be repaid.

     It is like raiding your child’s college fund to have a little spending money for yourself today. Our children will end up paying for those tax cuts. I previously wrote about this issue in my article of June 24, 2005, and in my column of June 23, 2006.

     The new study, however, shows that the tax cuts do far more than simply defer the taxes to a later time. For example, it shows that for 99 percent of Alaskans, the-so called tax cuts actually increase the future debt burden that must be repaid by more than three fold.

     In other words, on average if they get a tax cut of $1,000 today, they will end up paying over $3,000 in taxes in the future as a result of that tax cut. This is because of interest and other charges incurred in servicing the debt.

     So it is not really a tax cut at all. The government is essentially loaning the money to you at a high rate of interest. Not only is there no truth in lending disclosure for that loan, but you also can’t even refuse the loan. Sure, you can decline to take the money, but if you do, your future tax debt burden will still go up to help repay the loans that have been made to other people.

     George Bush isn’t giving you back your own money ... he’s a loan shark.

     Here is another very interesting fact disclosed by this study. For the top one percent of income recipients in Alaska, the tax break actually does save them money. Those are folks who received at least $765,700 in income per year. In this elite category, an average tax cut of $51,130 per family member will only cost them about $34,139 in increased future tax debt burden.

     With 99 percent of Alaskans having an increased tax burden, and one percent having a reduced tax burden, the so-called tax cuts can only be seen as a program to redistribute wealth from the poor and middle classes to the rich.

     You probably already know who fares the worst under these so-called tax cuts. It is the bottom 20 percent of income earners according to the study. They get an average tax cut of $540, and an average increase in their future tax debt burden of $7,373, for a net loss of $6,833 per person. This is a future tax debt burden more than 13 times greater than their tax cut.

     But that is not any real surprise. Loan sharks always prey on the weak and powerless.

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