“We just have a different philosophy. Let me talk about tax relief. If you pay taxes, you ought to get tax relief. The Vice President believes only the right people ought to get tax relief. I don’t think that’s the role of the president to pick you’re right and you’re not right. I think if you’re going to have tax relief, everybody ought to get it.”

— George W. Bush in his October 17, 2000 debate with Al Gore

Those words defending the virtues of across the board tax cutting — among the most pointed in Candidate Bush’s campaign — are hard to square with the tax on dividends that President Bush is expected to announce tomorrow. Mr. Bush is defending the proposed change as one that would end the practice of taxing dividend payments made by corporations to their shareholders after the same money has already been taxed as corporate profit. “There’s a principle involved,” the president said yesterday. Ari Fleischer, the White House spokesman, said today that there were 35 million people who received dividend income, including 10 million elderly people. “The president does not think it is right to tax savings and to penalize people who save, and the president does not think it is right to penalize people who plan for their future,” Mr. Fleischer said. It strikes us as a better argument for getting rid of the tax on corporate profits than for getting rid of the tax on dividends. Certainly Mr. Bush’s move may give New York and the stock market a boost, but it seems a mistake for the nation’s tax and investment policy to be driven by such narrow interest. Given how overtaxed Americans are, it seems churlish to object to any tax cuts that Washington deigns to offer. But with the complexity of the current tax code and all the ways in which it distorts individual behavior, creating a newly tax-favored class of income — corporate dividends — seems like something less than a step in the right direction. Better for the president to spend his political capital on expansion of tax-free savings accounts, on fundamental tax reform moving toward a flat tax, on further accelerating rate reductions, or on partial privatization of Social Security.