MEDIA WATCH: Dividends of Bush's tax-cut plan aren't apparent to many

President Bush knew that critics would deride his $674 billion tax-cut plan, whose centerpiece is the elimination of the dividend tax, as a break for the wealthy. After all, in the weeks before his plan was formally presented, there was widespread reporting that characterized his plan as such.

President Bush knew that critics would deride his $674 billion tax-cut plan, whose centerpiece is the elimination of the dividend tax, as a break for the wealthy. After all, in the weeks before his plan was formally presented, there was widespread reporting that characterized his plan as such.

So when Bush unveiled his plan, he stressed that retirees and senior citizens are among the largest demographic groups owning stocks that pay a dividend. President Bush must have figured that while the public would more likely galvanize against perks for a small number of rich folks, it would be much more difficult for anyone to pick a fight over something that would benefit the elderly, who make up a much larger portion of the population anyway. Furthermore, senior citizens are renowned as the most reliable voting group, and positioning the cut as good for them must have seemed like a mix of solid PR and strong politics. However, an analysis of editorials and op-eds in leading newspapers across the country reveals that if Bush wants to pass his tax-cut plan, he will need to do a better job of selling it. By a margin of greater than two to one, editorials and op-eds overwhelmingly argued against the President's plan. Larger-circulation dailies such as The New York Times, the Chicago Tribune, the Los Angeles Times, USA Today, and The Washington Post led the opposition. Critics drove home the point that there are three things wrong with Bush's plan. Even in coverage that was supportive of the President, these three points had to be refuted. First, nine out of ten articles continued to characterize the cut as a break for the wealthy, while only a handful covered Bush's comments that positioned the plan as good for seniors. The Kansas City Star (January 9) wrote, "Some apologists talk about wanting to help the elderly; Bush's dividend proposal would help elderly with lots of money in the stock market." Critics argued that the money should go to the low- and middle-income groups, who are more likely to spend the money. The second most frequently voiced concern with the plan is that it will increase the federal deficit, which was viewed as especially risky in light of all of the unknown costs regarding the creation of the homeland security department and a looming war in Iraq. There was frequent talk of the prospect of "ballooning deficits." The third point is that the Bush plan does not provide an immediate, short-term stimulus for the economy. Instead, its benefits are spread out over a 10-year period, rather than front-loaded toward the time when they are most needed: right now. The Wall Street Journal (January 8) was unmistakably in the minority as it enthused that the President's plan was "an excellent program... a bull's-eye, for sure." Critics of the President's plan appear strongly united, which will make passage of the proposal into law rather difficult. For Bush, it appears that he'll either have to go back to the drawing board to find another way to position his plan or he can look for ways to whittle down parts of the plan to make it more palatable as part of a compromise package.
  • Evaluation and analysis by CARMA International. Media Watch can be found at www.carma.com.

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