Most of the major media have joined in a familiar refrain regarding the president’s proposed tax cuts. They portray the Senate decision to scale back the size of the tax cut as a victory for Senate moderates. Yet trumpeting these modest reductions as a victory is one more symptom of the conservative tenor of our media and politics. Absent more basic revisions in this tax cut, most Americans would be better off without it.

The Senate Finance Committee, including Maine’s Olympia Snowe, has started the tortuous process of crafting the final Senate version of the bill. The Senate debates merit close attention. These debates, of course, reflect and ratify the winners and losers in our currently truncated politics. Yet they also shed some light on long-standing philosophical divisions in American politics.

The Finance Committee has scaled back the reduction provided those in the top tax bracket, 39.6 percent, a figure that kicks in as incomes approach $300,000. President Bush had proposed slashing this top marginal rate to 33.6 percent. Democrats and even a few Republicans insisted this reduction be limited to 36 percent so more money would be available to enhance the childcare credit.

Phil Gramm, the staunchest of the supply-side advocates, charged that large tax cuts for the wealthy became vulnerable only because “the last form of bigotry acceptable in this country is bigotry to the successful.” Gramm’s accusation deserves a more complete answer than it will likely receive from the moderates and even from many liberal Democrats.

The average income of the richest 1 percent of Americans already increased $200,000 between 1992 and 1998 (the last year for which full figures are available). The Bush administration argues that giving these Americans another tax boost will encourage more entrepreneurial investment. Yet the whole history of such “supply side” ventures suggests the more likely outcome is both higher levels of luxury consumption and more speculation in the stock market.

Luxury consumption helps fuel our balance of trade problems. Most money invested in the stock market boosts market prices but does little to increase tangible business investment. Even where it does, such as through initial public offerings, investments are often misguided. The enormous stock market bubble of recent years encouraged disproportionate investments in the wrong technologies.

As Dean Baker, co-director of the Center for Economic and Policy Research, puts it, “If many of the Internet stocks were significantly overvalued…, it means that tens and perhaps hundreds of billions of dollars that could have been invested productively were instead wasted in poorly conceived ventures.”

More fundamentally, many of the gains the rich have made in recent years cannot be attributed to hard work or entrepreneurial skill. Escalating profits in many industries, including health care, media, airlines, drugs and energy, reflect government subsidies and growing market power more than innovations that have served the consumer. George Bush’s own former Texas Rangers’ partners benefited immensely from a taxpayer supported sweetheart deal for their new stadium.

Nor have rewards within American industry been distributed in ways that reflect on performance. Despite gains in worker productivity, working-class incomes have been essentially stagnant over the last two decades. Management compensation – even for failing companies – has soared. Finally, supply-side advocates have never been able to provide any evidence that Bill Gates and his ilk would work longer hours if they could keep a bit more of their take home pay.

Another group is working hard and deserves more adequate compensation. Sen. Snowe has properly advocated that more of the president’s proposed increase in the childcare tax credit be refunded to parents even if they owe no income tax. Don Nickles, R-Okla., strenuously rejects this proposal, saying it is giving in to class warfare: “What I want is a tax cut for taxpayers.”

Nickles makes two mistakes here. He seems unaware that most working parents are taxpayers. Despite many hours of paid work, their incomes fall below the income tax threshold. Nonetheless, they are disproportionately burdened by payroll taxes as well many state and local taxes.

Like conservatives of the New Deal era, who denied domestic workers the benefits of Social Security, Nickles also suffers from a myopic perspective on household work in all its forms. The uncompensated work of parents is at least as socially important as anything occurring in corporate boardrooms.

Tax policy should reward work, but the most effective and least compensated work today isn’t going on in board rooms or executive suites.

John Buell is a political economist who lives in Southwest Harbor. Readers wishing to contact him may e-mail messages to jbuell@acadia.net.