Richest Cabinet in History Would Gain from Bush Tax Cuts

by Julian Borger in Washington

Published on Tuesday, February 27, 2001 in the Guardian of London

The Bush administration's generous tax-cut plans were put into perspective yesterday when it was reported that the new treasury secretary, Paul O'Neill, earned more than $56m last year as chairman of Alcoa Inc, the giant aluminium corporation.

Mr O'Neill, much of whose income came from exercising share options, should feel at home in the Bush cabinet, which is by far the wealthiest in US history.

The cabinet is a veritable tycoons' club with seven of its members owning assets worth more than $10m (£6.8m). Eleven of the remaining 12 are millionaires. The pauper in their ranks is the agriculture secretary, Ann Veneman, whose property's minimum value is only $680,000, but then again under favourable conditions, her net worth could be as much as $2m.

The president has assets valued at $11m-$21m, including a sizeable Texas ranch. Much of that money was made while he was a manager and shareowner of the Texas Rangers baseball team, which benefited greatly from state funding of its stadium.

Twelve of the US cabinet would qualify as millionaires in pounds sterling. Among their British counterparts only the Lord Chancellor, Derry Irvine, could hold his own in such monied company.

The figures, which were revealed in financial disclosure forms submitted to the US Office of Government Ethics, are especially striking in view of the new administration's $1,600bn tax-cut proposal, which Mr Bush has set out to sell to a generally sceptical American public.

As part of that sales pitch, Mr Bush introduced an "ordinary" couple, Paul and Debbie Peterson, who he said would stand to gain $1,100 a year from the plan to cut taxes. However, the president did not mention that, on the basis of its latest tax returns, the Bush family would benefit by up to 60 times that amount, according to a calculation published in the Wall Street Journal.

Under the plan, tax rates on top earners would drop from 39.6% to 33%, while the lowest rate would be brought down from 15% to 10%.

However, many low-earning families would hardly benefit at all, because they already benefit from Clinton-era tax credits designed to help the country's working poor.

The US Census Bureau estimates that 3.7m US households suffer from hunger as a result of being unable to afford to buy basic food items. Many more, about 9m households, have "uncertain access to food".

The agriculture department reported last year that up to 12m people, including a million children, are eligible for food stamps but are not receiving them because of red tape, lack of information or family pride.

Meanwhile, families at the Bush-O'Neill end of the scale will not only benefit from income tax cuts if the Bush plan gets through congress unaltered. The proposals include the elimination of inheritance tax, which affects only the wealthiest 2% of the population with more than $1.35m to leave their children. The Republicans have dubbed it the "death tax".

The Wall Street Journal calculated that all but three of the Bush cabinet were rich enough to benefit from the abolition of the tax.

Richest six in cabinet of tycoons

George Bush, president: $11m-$21.6m

Dick Cheney, vice-president: $19.3m-$81.7m

Paul O'Neill, treasury: $62.8m-$103.3m

Donald Rumsfeld, defence: $61m-$242.5m

Colin Powell, secretary of state: $19.5m-$68.9m

Mitchell Daniels, budget: $18.1m-$75.3m

Source: Office of Government Ethics financial disclosure forms.

Political Corruption page

Index of Website

Home Page