A Good Tax Bill Will Be Vetoed
August 30, 1999
The first order of business for Congress after returning from the August recess will be to send the tax bill it passed on August 5 to President Bill Clinton for a certain veto. Republican leaders deliberately held it back in order to use the recess to build public support. Hundreds of events were organized throughout the country to promote the $762 billion tax cut. Unfortunately, there is little evidence Americans are clamoring for it and it is unlikely Clinton will suffer any political harm from vetoing it.
The bill was introduced and voted upon in haste. Less than four weeks separated introduction of the legislation -- with no advance hearings or public discussion of its content -- and final passage by 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 war, Congress took the time to have hearings on key provisions of major tax bills.
Nevertheless, 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 five years, among other things.
These are all very desirable and necessary tax changes, 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.
Source: Bruce Bartlett, senior fellow, National Center for Policy Analysis, August 30, 1999.
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