Interestingly, the original Republican Contract With America offered the tax credit for working families of all incomes. Ways and Means Chairman Bill Archer squeezed out those at the bottom only when this year's agreed-on pot for tax relief proved too small to cover everyone and still leave room for breaks on estate taxes, capital gains, and individual retirement accounts, all of which mostly favor wealthier Americans. On capital gains, the policy tilt is similar. Republicans also argue that lower capital-gains rates would encourage new savings and investment that would benefit everyone. But the lower rates raise dicey questions of equity.
Republicans favor the well off in other proposed measures.
Yet under the current exemption, only 1.7 percent of estates are taxed at all. On education, both parties favor upper-income families. Unlike a tax credit, it does little or nothing for poorer students whose families owe little income tax. The Republicans one-up the president, however, aiming their proposal even more toward upper incomes. In the war for public opinion, the analyses of who benefits are critical.