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Economic Stimulus and Unrewarded Patriotism
An Essay by Kevin Phillips

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Kevin Phillips

Kevin Phillips
Photo: Basic Books

Oct. 25, 2001 -- War profiteering is one of the oldest ways of making big money. George Washington and Abraham Lincoln deplored it again and again during the Revolutionary War and the Civil War. During the 20th century, the federal government made major strides in curbing it.

This was especially true during the first and second world wars when the administrations of Woodrow Wilson and Franklin D. Roosevelt tried to ensure fairness by raising the top income tax rates, imposing excess profits, taxes, setting up wage and price controls and establishing more labor boards.

What's new during the war on terrorism, apparently, is that these restraints no longer apply. Unrewarded patriotism is for firemen, policemen and ambulance drivers. The House of Representatives, in the phony name of economic stimulus, just voted $100 billion of largely corporate and upper bracket tax breaks, ones they wouldn't have dared to pass without the air cover of the September 11th crisis.

"The House of Representatives, in the phony name of economic stimulus, just voted $100 billion of largely corporate and upper bracket tax breaks, ones they wouldn't have dared to pass without the air cover of the September 11th crisis."

Kevin Phillips

The few billions for the poor and the jobless are just camouflage. Over three-quarters of the $100 billion goes for business and upper income objectives. One focus is the elimination of the corporate alternative minimum tax and the rebate of $25 billion of corporate alternative minimum taxes previously paid.

About $2.3 billion would go to Ford and about $1.4 billion to IBM. Forty billion dollars goes to corporate tax breaks for business investment. Also, individuals will have some of their income tax reductions enacted last year come sooner than planned. And capital gains taxes will be reduced from 20 percent to 18 percent, a boon for the top 1 percent of taxpayers.

Neither house of Congress has ever passed this kind of major tax bill in wartime, and no one in the House assumes that the Senate will accept it in whole. But the more extreme the House bill, the further that will drag the eventual compromise in that same inexcusable direction. The only real solution is a public outcry, tens of millions of pointing fingers and voices saying, “Shame.”

Kevin Phillips' latest book is "The Cousins' Wars: Religion, Politics and the Triumph of Anglo-America."