Bush has been open about each item he wants: lowering taxes on capital income, such as dividends and capital gains; creating two big new income-sheltering investment plans; eliminating the estate tax. But he's not been at all forthcoming about the ultimate effect of his program. If Bush gets what he wants, the income tax will become a misnomer—it will really be a salary tax. Almost all income taxes would come from paychecks—80 percent of income for most families, less than half for the top 1 percent. Meanwhile taxpayers receiving dividends, interest and capital gains, known collectively as investment income, would have a much lighter burden than salary earners—or maybe none at all. And here's the topper. In the name of preserving family farms and keeping small businesses in the family, Bush would eliminate the estate tax and create a new class of landed aristocrats who could inherit billions tax-free, invest the money, watch it compound tax-free and hand it down tax-free to their heirs.
By drastically favoring investment income over salary, fees and other "earned income," Bush would make it harder for people who start out with nothing to earn their way up the economic ladder, because they'd pay full taxes on almost everything they make, but he'd shower rewards on people who have already made it to the top rungs.
