Reply
Wed 23 Apr, 2003 09:07 am
Another Senseless Tax-Cut Attempt
With this year's federal deficit exploding toward the $500 billion level and the national-debt ceiling needing a trillion-dollar increase, it seems unfathomable that Congress and the White House remain locked in a suicide pact of yet another tax cut. Yet here comes that persistent White House sales team with a fresh label on their tax-cut patent medicine. Facing only a small Senate line of Republican resistance, President Bush has sent out aides with some smooth talk about a phased-in, rather than full gulp, version of his beloved dividend tax cut. His plan would cost the Treasury $396 billion in lost revenues in a 10-year boon accruing mostly to upper-bracket taxpayers.
The administration move signals a strategic bid in a sorry high-stakes Capitol poker game over the size and nature of another tax reduction. The dispute should be about the wisdom of any tax cut right now in the face of deficit rollovers, costly debt and government retraction from basic services in states across the land. But the G.O.P.-led Congress has already sadly set the outcome somewhere between the $550 billion package of cuts that are yearned for by the House, and the $350 billion level that is the working maximum of the Senate's few Republican holdouts, backed by the Democratic minority.
Various counterbids and schemes are being floated: ratcheting up the Senate figure by promising spending offsets, perhaps. Or delaying the president's plan to speed up high-income tax breaks enacted two years ago. But the important bid now is not the White House's sounding friendlier toward the Senate's smaller ante; it is the president's determination to win some form of the dividend tax cut. This is a measure with theoretically long-term benefits, at best, but a mistimed disaster as revenues shrink and deficits balloon. Affluent beneficiaries will not be likely to spend the money as a short-term stimulus.
Our lawmakers are in recess, and as they press the flesh and take stock of the national pocketbook, polls of their constituents are clearly spiking with greater wariness about another tax cut. When Congress returns to the tax-cut game, answers will be at hand to two key questions: who is listening and who is counting?
Do you believe with the present state of the economy there is any justification for the Bush proposed tax cuts? Will the economy benifit?
No, there is no justification, as more and more Republicans are admitting.
Bush gives new meaning to the word "relentless."
interesting i didn't know that well at least i heard about it but yea
Misguided Cuts in Washington
The political dichotomy is breathtaking: as state and local politicians struggle with deepening deficits and rising taxes, President Bush plays the fiscal Nero, the virtuoso fiddler for ever more tax cuts. If the Washington wing of the G.O.P. is deaf to the cries of pain from the nation's statehouses, surely it must hear the measured warning from Alan Greenspan, the nation's economic guru, that new tax cuts are definitely not needed now. They will probably harm the economy, not help it, he cautions, compounding the Republicans' feckless deficit spending while pushing up the national debt along with interest rates.
But, no, the detaxation mania continues apace as House and Senate leaders press toward a Memorial Day deadline that will be a rendezvous with foolhardiness. By then, they hope to enact a Bush tax cut and spending plan adding $2.7 trillion in deficits to a coming decade of red ink — this only two years after the first Bush tax cuts helped wipe out an anticipated $5 trillion surplus. Not so coincidentally, Congress will have to raise the $6.4 trillion debt ceiling immediately to help pay for borrowing that is likely to last even longer than the easy careers of our detaxation politicians.
The most feverish concern discernible right now among Republican leaders is not the fate of the emergency unemployment benefits that are due to expire this month, affecting 3.9 million Americans. It is the preservation of as much as possible in the president's disastrous dividend tax-cut plan. A pitifully small group of Republican resisters is holding out, demanding $200 billion less in an agenda that could still eventually top $1 trillion in tax cuts.
Cutting the dividends tax may make some of Mr. Bush's key supporters happy, but there are two things it really will not do: juice up the economy or significantly reduce most taxpayers' total bills as the burden shifts downward. The pending Bush tax cuts will cost the states at least $64 billion more over 10 years, according to the Center on Budget and Policy Priorities, a private watchdog group. The federal government's failure to help localities pay for critical services during a slumping economy has sent state and municipal taxes soaring. And although the president is selling his cuts as a fast job-creating stimulus, it is hard to find many serious economists who agree, particularly when it comes to the dividends tax. Economy.com, a private forecasting specialist, estimates that the dividend cut will mean very little in comparison with the instant bang for the buck that would come from an extension of jobless benefits and an infusion of emergency aid to the states.
Stumble It!
Tweet This
Bookmark on Delicious
Share on Facebook
Share on MySpace