October 4, 2000

Several years ago, I wrote a monthly newsletter similar to Mark's Forecasts & Strategies, called Jo Ann Skousen's Money Letter to Women. It was intended for women who were just entering the investment world for the first time, although many of my readers were men. I enjoyed helping people learn about money management, I enjoyed having a forum, and I enjoyed meeting my subscribers at investment conferences around the world.

Eventually, however, Mark and I decided we should combine our two letters, so we wouldn't be constantly facing our alternating deadlines. I have continued working in the background with him on his newsletter and book projects, and I still speak occasionally at investment conferences. I still meet former subscribers sometimes, and they often ask me if I will ever start my letter up again.

Who knows? I might. But in the meantime, Mark has asked me to write a column for his webpage, which we have called "Odds & Trends." It will be just that--my comments on the oddities and trends I see in the world today. I'm happy not to have a 16 page deadline facing me, but I'm also very happy to have a forum once again. So here is my first column for Odds & Trends, based on the presidential debate between Al Gore and George W. Bush October 3, 2000.

Watching the debates last night, the schoolteacher in me wanted to put on my sternest teacherly face, sit little Al down in his desk, and admonish him, "Play fair. Wait your turn. Follow the rules. And answer you own questions!"

It was obvious that Gore's game plan was, no matter what the question, to repeat as often as possible his own spin of Bush's economic plan: that the top 1 percent of income-earners in this country would receive the largest portion of the surplus under Bush's tax-relief proposal. Like all good Marxists, Gore wants to polarize this country between the hypothetical have's and the have-not's, to create a class warfare that doesn't exist or that is diminishing on its own through the creation of a vast, hardworking middle class.

Bush gracefully but forcefully parried the thrusts, countering with his own explanation of his own plan: that everyone who pays the bills will receive a part of the surplus returned to them. After all, it's their money!

I would go one step further. Instead of focusing on how much of their own money taxpayers will get back, how about looking at how much money each will still pay? Under the current system, a person with net income of $1 million pays $380,000 in federal income taxes. That's a lot of money. It's more in dollars than lower-income earners pay, and it's more in percentage rate too, 38% compared to 15 %.

Bush vowed that no one should have to pay more than a third of their income in taxes. So under his plan, the million-dollar net income earner would pay approximately $333,000. Yes, that's a big savings off the previous tax bill. But that's still a lot of money. A huge amount of money, in fact.

The rich pay plenty in this country, and I appreciate them. Yes, the top 1 percent will receive the largest nominal return, but that's because they already pay the largest nominal (and percentage) amount!

The bottom line is this: Under Bush's plan, everyone who pays a share of the bills receives back a prorated share of the surplus. Rates for the lowest income-earners will go from 15 % to 10 %. That's a savings of one third. Rates for the highest income earners will go from 38 % to 33.3%, not as a high a rate of savings, but admittedly a larger amount of money.

I don't pay very much on my little teacher's salary, but I'll be glad to get my little amount back. And I don't begrudge the wealthy their larger amount. After all, their taxes pay for a lot of my benefits, and I appreciate them. Let's not make the wealthy into villains.

-- Jo Ann Skousen

email: jaskousen@mskousen.com

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