January 29, 2003

January 29, 2003 | Commentary on Taxes

Payback for the rich?

When I hear liberals bash President Bush's tax-cut proposal as a sop to the rich, I think about these two guys in North Carolina I recently heard about - Billy Prim and Andrew "Flip" Filipowski.

Billy and Flip, two brothers-in-law, run Blue Rhino Corp., a propane cylinder-exchange business in Winston-Salem, N.C. Flip also serves as chairman of Divine Inc., a Chicago-based Internet firm. They're the kind of guys to whom tax policy really matters.

We'd all like to pay less in taxes, but for them, low tax burdens are crucial. Taxes can make the difference between profit and loss, between adding employees and hanging on, or even between preserving an important and beloved community asset - in this case, the local minor league baseball team - and watching it leave.

When their local team, the Winston-Salem Warthogs, went on sale two summers ago, it had no shortage of would-be buyers, but all of them wanted to move the team out of town. Minor league baseball has become one of the hottest entertainment buys in the country. In the last five years, Aberdeen, Md., Akron, Ohio, Louisville, Ky., and Mobile, Ala., all have ponied up for new stadiums in which their teams now play to huge crowds. In the northern suburbs of Dallas, the Frisco, Texas, Roughriders will begin play this spring in a 12,000-seat stadium in which every seat will be occupied by season-ticket holders who paid $18 per game - at least $10 above the average minor-league ticket price.

Thankfully for Winston-Salem, the current owner held out for local buyers. Winston-Salem doesn't have a new stadium and there are no plans to build one. And the Warthogs don't draw huge crowds - most nights the 6,280-seat facility is about one-third full, and attendance had declined in recent years. But professional baseball has been part of the city for the last 100 years, and no one wanted to see that end.

Billy and Flip have made an offer, which baseball officials are reviewing now. If they win approval, they will be heroes for having saved baseball in Winston-Salem.

That's why this class-warfare rhetoric about President Bush's tax cut proposal doesn't ring true. It's safe to say few people in Winston-Salem resent the success of Billy and Flip. Most just wish them well. Many just want to know the secrets of their success.

So it's odd that all we hear about President Bush's economic proposal is how disproportionately beneficial it is to the top 1 percent of all taxpayers. People dwell on this despite the recent poll that revealed that 19 percent of Americans believe they're in that top 1 percent, and another 20 percent expect to be there soon.

It's not resentment that motivates these people. It's the prospect that one day, they can join Billy and Flip at the top of the ladder; they can save the local ball team for their fellow townspeople. All they ask from government is a fair tax code that doesn't get in the way of their dreams.

Agenda 2003, The Heritage Foundation's policy playbook for the 108th Congress, outlines several steps Congress can take to make this happen. Heritage's experts say lawmakers should make the tax cuts passed in 2001 permanent (they now end in 2011) and speed them up. And when it totals up the "cost" of tax cuts, Congress should take into account that tax cuts encourage growth and that growth means the cuts don't "cost" the government money but usually, in fact, produce more money for government coffers.

Why? Because the Billys and Flips of the world don't simply throw the extra money out into the street. They invest in their businesses. They spin economic gold that reverberates throughout the economy.

Congress also should take aim, say the Heritage experts, at instances where government taxes the same dollar twice. In other words, it should eliminate the inheritance tax, the capital-gains tax and the tax on dividends, among others.

Let's end the demagoguery that surrounds so many of these debates. When Americans - and not just those in Winston-Salem - look at Billy Prim and Flip Filipowski, they see guys in white hats. Too often, unfortunately, they also see tax laws that don't treat them that way.

Rebecca Hagelin is a vice president of the Heritage Foundation, a research and educational think-tank whose mission is to formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values and a strong national defense. She is also the former vice president of communications for WorldNetDaily and her 60-second radio commentaries can be heard on the Salem Communications Network.

About the Author

Rebecca Hagelin Senior Communications Fellow

Related Issues: Taxes

-Reprinted with permission of the Internet newspaper WorldNetDaily.com.