The real effect of Congress’ recent tax cut plan, which was vetoed by President Clinton, would have been to give away massive amounts of new "corporate welfare" and tax cuts to America’s wealthiest individuals. Clinton objected to the size of the proposed tax cut ($792 billion), but indicated he would support up to $300 billion in unspecified tax cuts—merely a scaled-down version of a bad bill. In 1997, he signed a "compromise" tax bill that gave the majority of tax cuts to the richest 5 percent of households.
The beneficiaries of these tax changes clearly would be the wealthiest 10 percent of the population, who would receive two-thirds of the tax cuts, according to Citizens for Tax Justice. The 60 percent of the taxpayers in the middle income quintile and below would receive less than 9 percent of the total tax cuts. Their average tax reduction would be only $157 a year. The best-off one percent of taxpayers, those making more than $301,000, would get an average tax reduction of almost $46,000 a year. The bill was structured to phase-in certain tax cuts over 10 years, with the corporate tax breaks and capital gains cuts first—and the few cuts that help working families not coming until five years later.
Hidden in the fine print was an estimated $82 billion in new corporate welfare subsidies, in addition to the existing $125 billion a year in corporate subsidies and loopholes. Major political contributions from military, restaurant, oil and gas, and insurance corporations helped to purchase sweeping tax cuts and loopholes. The big ticket item is $36.8 billion over 10 years in new foreign tax-haven shelters for multinational banks, insurance companies, auto makers, oil companies, weapons makers, and others.