Issues Before Congress | |
Politicians Playing Tax Cut Party Games |
On Saturday, the House of Representatives passed a tax bill both supporters
and opponents know is not serious. It was designed to give Republicans
an election issue, and Bill Clinton will veto it. For their part, Democrats
opposed it using arguments they knew were not true.
Republicans claim to be reducing the marriage penalty, a serious tax
problem that only affects two-earner couples. But an increase in the standard
deduction for married couples gives a tax cut to many married couples, including
single-earner couples, completely unaffected by the marriage penalty. And
the cuts go only to those who do not itemize deductions, limiting its effect
on those actually suffering from a marriage penalty.
The Republican plan also includes a tiny exclusion of interest and dividends
from taxation ($200 for singles, $400 for couples). This will do absolutely
nothing to encourage new saving and investment and mainly rewards people
for past saving and investment.
Finally, since tax legislation takes many months to get through Congress,
any serious effort to cut taxes this year should have started in the spring,
not two weeks before Congress' scheduled adjournment.
The Democrats have been even more disingenuous. Since we are running
a budget surplus they could not say a tax cut will increase the deficit.
So they decided to claim the tax cut somehow threatens Social Security.
It's enough to make anyone cynical about politics.
Source: Bruce Bartlett, senior fellow, National Center for Policy Analysis,
September 30, 1998. |
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