Opinion Editorial | |
| Monday, August 30, 1999 | |
A Good Tax Bill Will Be Vetoed |
Congress will be returning shortly from the August recess. Its first order of business will be to send the tax bill it passed on August 5 to President Bill Clinton for a certain veto. Republican leaders deliberately held back their bill so as to use the recess to build support for it. Hundreds of events were organized throughout the country to promote the $762 billion tax cut. Unfortunately, there is little evidence that Americans are clamoring for it and it is unlikely that Clinton will suffer any political harm for vetoing it.
A key reason is that Republicans have done an extremely poor job explaining what is in the bill or its rationale. This is due primarily to the extreme haste in which the bill was introduced and voted upon. Less than four weeks separated introduction of the legislation -- with no advance hearings or public discussion of its content -- and final passage by both the House and Senate. To my knowledge, no major tax bill in U.S. history has passed both houses of Congress in such a short period. Even during wartime, Congress took the time to have hearings on key provisions of major tax bills.
If Republicans were serious about getting this bill enacted into law, the leadership should have ordered every committee in the House and Senate to hold hearings on it during August. As everyone knows, this is a dead time for news in Washington and they probably would have gotten good media coverage. Prominent experts could have been called in to explain in detail why various provisions of the bill are needed and the legislation as a whole is worthy of enactment.
Nevertheless, in spite of the poor preparation and the undo haste, Congress managed to pass a bill that is actually quite good. Unlike the 1997 bill, this one will reduce taxes for every single taxpayer by lowering statutory tax rates. It relieves the marriage penalty, abolishes the estate tax and the alternative minimum tax for individuals, indexes capital gains for inflation, expands individual retirement accounts, and extends the research and development tax credit for 5 years, among other things.
These are all very desirable and necessary tax changes. If brought up for a vote individually, many would have virtually unanimous congressional support. But it is doubtful that very many Americans know about these provisions, because Clinton has framed the whole debate in terms of aggregate numbers, divorced from the bill's content. It is telling, however, that as a share of the economy, the congressional tax bill is smaller in size than Clinton's 1993 tax increase (see figure).
Source: Bruce Bartlett, senior fellow, National Center for Policy Analysis, August 30, 1999.
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