REPUBLICAN TAX-CUT FLIM-FLAM
Tax-cut deception gives politics a bad name
By E.J. DIONNE
If you want a clear example of why the rest of the country looks upon the
nation's capital cynically, take the tax bill passed on Thursday. It provides an
excellent rationale for all voters who prefer enjoying their vacations or
worrying about the drought to thinking about politics.
The important fact is this: The nearly $800 billion in tax cuts over 10
passed not despite President Clinton's promise to veto it, but because Clinton
said he'd never let it become law. No one who backed it had to worry about
Indeed, some of the very best arguments against the bill were made by
Republicans who voted for it. "Because of the uncertainty of projecting
budget surpluses over a 10-year period, and given all the other priorities we
face, I am simply not comfortable with an $800 billion tax cut," said Sen. John
Chafee, R-R.I. "Cutting taxes is only one of several important priorities
toward which our budget surplus should be directed."
Chafee said he voted for the bill to "keep the process moving" but added:
would prefer a much smaller bill."
Sen. John McCain, R-Ariz., also voted for the bill, but here's what he
about it: "This bill is not acceptable to me. Special interests get the biggest tax
breaks, and they get them right away. All the American families get are the
McCain then listed some of the interests who got a piece of the bill: "Chicken
farmers get an immediate tax break. ... Small seaplane operators don't have to
collect ticket taxes, starting immediately. ... Manufacturers of fishing tackle
boxes get an immediate excise tax break. ... The people who make and sell
arrows for hunting fish and game get an immediate cut in their taxes."
As McCain noted, most of the tax breaks that might benefit ordinary
taxpayers -- albeit mostly wealthier ones -- are delayed until 2005 or later.
Yet because of Senate budget rules, the whole package in effect dies (or
"sunsets," as legislators like to say) in 2009.
Remember, as McCain does, that many supporters of the bill have said they're
for "flatter" taxes. But all the new loopholes would install the equivalent of
Mount Everest, with all its tall and craggy peaks, into the heart of the tax
Sen. Jim Jeffords, R-Vt., suggested just a day before the final vote that
oppose the bill. The Republican leaders got him to vote yes by offering $11
billion in new benefits for low-income housing, child care and working poor
people who get the Earned Income Tax Credit.
Most of the concessions Jeffords won are good provisions. But their modest
size compared to the bulk of the bill only highlights how little relief it gives low-
and middle-income taxpayers.
The top 20 percent of American families get 79 percent of its benefits,
according to a Treasury Department study.
How does that work out in practice? A couple with two kids earning $50,000
a year would get $265, according to an analysis by Deloitte & Touche.
Michael P. Ettlinger, tax policy director for Citizens for Tax Justice, says this
analysis underestimates the bill's impact on the wealthiest taxpayers.
His group finds that families earning over $300,000 would average roughly
$46,000 in reductions when cuts in capital gains, estate taxes and other
provisions are taken into account.
A handful of Republicans who voted against this bill explained why many
their colleagues who voted for it are glad it won't become law. Rep. Connie
Morella, R-Md., said in an interview that most voters know perfectly well this
tax cut won't happen.
"The people don't need to be fooled about this," she says. "They want to
realistic and have us start at the beginning with something that can go through,
a smaller tax cut, rather than this bloated bill that can never pass."
"If we experience a downturn, these surpluses could easily turn to deficits,"
said Rep. Mike Castle, R-Del. "The assumptions necessary for a $792 billion
tax cut leave no room for the unplanned, but almost certain expenses like
natural disasters and other emergencies."
"I came to Washington to help reduce deficits that our children and
grandchildren will pay for," said Rep. Greg Ganske, R-Iowa. "Caution should
be the word of the day."
But the day this tax bill passed was brought to you by the letter "P,"
posturing. Many who voted for it would do well to send Clinton a thank you
vote when he kills it.
He'll simply be doing what many of them believe he should -- and, in a
partisan Washington, might have done themselves.
Dionne is a columnist for The Washington Post.
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