The Republicans have done a masterful job of using language to convince the electorate to vote for policies that are not in their best interest. In the ongoing discussion of "Why Language Matters", today we look at what makes a tax loophole versus a tax cut.
Our current tax system provides strong benefits to investment income. The centerpiece of the "Bush Era Tax Cuts" was a reduction in the rate that investment income was taxed. Instead of treating long term capital gains and "qualified" dividends as regular income, they're taxed at a much lower rate. Everyone across the board, from the media to both the Democrats and Republicans have referred to this tax system as a "Tax Cut". This simple linguistic twist lies at the center of why your average American, who as no chance of ever benefiting from this tax system, consistently votes in favor of maintaining it.
And who wouldn't want to maintain a "Tax Cut"? You know that you're not benefiting from it now, but it gives you the idea that if you bust your butt at work and get a nice raise, maybe some day you will get a cut in your taxes. Or what about a "Tax Break"? Sound great to me, who doesn't want a break? Everyone deserves a chance to get a break - that sounds fair to me, right?
But what if we started calling this system what it really is: "Tax Loopholes for the Wealthy"? Doesn't that more accurately described what's going on? These are special loopholes where some types of income get treated different than others. If you bust your but at your job every day and earn a salary, you're going to get taxed based on how much you're earning. But if that income comes from "qualified" dividends or long term capital gains, then you get a special loophole. Doesn't matter how much it is, it's capped at a special low rate.
These loopholes create special treatment for the wealthy who are more likely to gain income from capital gains and dividends. What if we started to call them "Special Treatment Tax"? Or "Exclusive Tax Rates"? Our language needs to emphasize the reality that the vast, vast majority of Americans will never benefit to any tangible extent from these loopholes and maybe they'll stop voting for them.
So what do you think? Let's come up with more creative and more accurate descriptions of what the "Bush Tax Cuts" are all about and see if middle America finally realizes they've been ripped off by one of the biggest cons of all time - voting for huge tax breaks for the wealthiest few and ballooning budget deficits.