Tax cut defenders distort the facts

by Charlie Vollmer - University student

I literally feel obligated, as a responsible economics student, to clear up more than a couple of distortions in the Minnesota Daily columnist Josh VillaâÄôs Feb. 3 editorial on the economy entitled, “DonâÄôt fear spending and tax cuts.” It must first be said that taking a text out of its context leaves you with nothing more than a mere pretext, and doing so is nothing short of shoddy, unacceptable journalism.

He declares that, “The fact is that the top 1 percent of income earners will pay nearly 21 percent of all federal taxes and the top 10 percent of earners will pay 48.5 percent of all federal taxes.” This can be misleading if we are not aware of the wealth distribution here in the U.S.

The 2010 findings of New York University economics professor Edward N. Wolff found that in the U.S., wealth is highly concentrated in relatively few hands. As of 2007, the top 1 percent of households (the upper class) owned 34.6 percent of all privately held wealth, and the next 19 percent (the managerial, professional and small business stratum) had 50.5 percent, which means that the top 20 percent owned a remarkable 85 percent, leaving only 15 percent of the wealth for the bottom 80 percent (wage and salary workers).

In terms of financial wealth (total net worth minus the value of oneâÄôs home), the top 1 percent of households had an even greater share: 42.7 percent. In 2010, the Central Intelligence Agency indicated that the U.S. actually sits 93rd in the world for wealth distribution equality. That is right between Iran and Mexico, to give some perspective.

Villa then goes on to state that, “Lowering taxes for all and cutting spending across the board will help reduce the deficit.” Figures on inheritance tell much the same story as the aforementioned wealth distribution case. According to a study published by the Federal Reserve Bank of Cleveland, only 1.6 percent of Americans receive $100,000 or more in inheritance. Another 1.1 percent receive $50,000 to $100,000. On the other hand, 91.9 percent receive nothing.

Thus, the attempt by ultra-conservatives to eliminate inheritance taxes âÄî which they always call “death taxes” for public relations reasons âÄî would take a huge bite out of government revenues (an estimated $1 trillion between 2012 and 2022) for the benefit of the heirs of the mere 0.6 percent of Americans whose death would lead to the payment of any estate taxes whatsoever.

What most irks me, however, are his untruths of cutting education spending. His statement “Throwing money at our education system wonâÄôt make it better” is a notion reminiscent of our state demagogue, Rep. Michele Bachmann, R-Minn.

There are currently 12 Minnesota School Districts using four-day school weeks for the 2010-11 school year. I donâÄôt need to do calculus to show you that those students are getting 20 percent less education than the other districts. I am not attempting to “guilt” taxpayers into thinking we as Minnesotans will be falling behind other Americans or, say, German public schools. But can Villa honestly mean that taxpayers providing the funding for children to go to school on Fridays is, in his words, “unnecessary and unproductive spending”?

Etched in stone atop the Northrop Auditorium is the University of MinnesotaâÄôs charter declaring that it is “devoted to the instruction of youth and the welfare of the state.” By publishing the uninformed, juvenile words of a wannabe Republican pundit, the Daily is fomenting neither of this institutionâÄôs principle objectives.

I am proud to be Minnesotan and even more proud to be a student here at the University. I respect that other people have other opinions on how they see our ideal society and I appreciate and desire to continue hearing and reading them. Freedom of press is one of our most valuable assets, so let us not dilute the open exchange with gross inaccuracies and facts taken out of context with the sole purpose of riling people. ItâÄôs unwanted, unsatisfactory and unwelcome here on campus.