Maine citizens respect Olympia Snowe and Susan Collins for their independence. President Bush came to Maine last month to rally support for his tax policy not only from citizens but also from these two important swing votes. Now it is our turn.

We need to convey a different message to our senators. The Bush tax plan is poorly targeted, badly timed, and based on a discredited rationale. It will have an adverse effect on Maine.

Bush and his apologists begin with a line that often resonates this time of year: Americans are overtaxed. Bush then promises to reduce income taxes. Unfortunately, administration rhetoric distorts the tax burden, and the remedy is selectively applied.

It is true that the federal tax burden as a percentage of gross domestic product or national output (20.4 percent is at its highest point since World War II. This ratio, however, is hardly caused by a bloated government sector. Federal spending as a share of GDP is at a 35- five year low. The gains in tax reveunes reflect the recent strengths of the economy, including large capital gains tax revenues based on a rate of stock appreciation unlikely to be sustained.

Even most conservative economists argue that the best measure of the tax burden is the ratio of taxes to changes in total wealth, income plus asset appreciation. Wheaton College economist John Miller points out that when we make this calculation, the average tax burden has declined over the last decade from about 18 percent to about 15 percent.

Some Americans are unfairly burdened by taxes, but these citizens would not be helped by the Bush proposals. The problem with the distributional implications of his plan lie not merely in its targeting the most relief to the highest marginal income tax bracket but also in the focus on income taxes. If Bush wished to assist ordinary working Americans, payroll tax relief would be the place to start. When we acknowledge, as almost all economists do, that the employer’s share of the payroll tax really comes out of the employee’s wages, the burdens of this tax become even more significant.

A majority of American workers already pay more in direct payroll taxes than in income taxation. As Kit St. John pointed out recently in these pages, 29 percent of Maine families, many working full time jobs, would see no benefit at all from the Bush proposal.

Since the tax burden experienced by many has become less onerous and his proposal omits those most burdened, the president’s initiatives have elicited little popular enthusiasm. He has been forced to resort to another argument to sell his cut: Tax cuts are insurance against economic decline.

Conservative economists who used to denounce fiscal fine tuning now assure us that their tax cuts will reinvigorate the economy. The only problem here is that even the most ardent liberal advocate of fiscal policy has long acknowledged that timing is everything. Tax cuts can often take too long to enact and implement. Money can start circulating into the economy just as expansion has resumed, feeding potential inflation.

This problem is even worse with the Bush proposal because reductions are back loaded, i. e. the biggest changes are scheduled years out. In addition, because those cuts are targeted to the most affluent, new money in consumer pockets today is likely to be saved rather than spent, reducing the so called “multiplier effect.”

Lurking in the background of the whole tax debate is the unstated article of faith that guides this administration. Bush’s principal economic adviser, Bowdoin alumnus Larry Lindsay, has frankly emphasized substantial tax cuts for the wealthy. He argues that they already pay the most and deserve relief. Furthermore, if their taxes are cut, they will have more incentive to invest in increased innovation and job creation.

Rather than compassionate conservativsm, Bush tax policy is Reaganism deja vu and subject to the same critique. The wealthy may pay more but they have done extraordinarily well in the last two decades. They also already benefit immensely from many federal expenditures. Military spending, federal highway funds, interest payments on the national debt, subsidies to agribusiness, and many government research and development initiatives on energy and drugs pad the return on and enhances the net worth of assets held disproportionately by the wealthy.

In addition, retrospective analysis is not kind to Reagan era economic policy. Reductions in both income and capital gains taxation were followed by relative declines in both savings and net corporate investment. Deficits skyrocketed, with little commensurate increase in corporate or social capital. Both Maine and the nation need no repeat of this misadventure. We should ask our senators to carry these concerns back to Washington.

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