4 Senate moderates vow limit on tax cuts

Associated Press | 03.14.03 | Alan Fram

[kcvl]

4 Senate moderates vow limit on tax cuts

2003-03-14 By Alan Fram Associated Press Writer

WASHINGTON -- Four moderate senators signed a letter Thursday stating that any tax-cutting economic growth plan must be limited to a 10-year price tag of $350 billion, dealing a major blow to President Bush's plan for a package twice that size. The stance by the bipartisan group -- which includes two Republicans, Olympia Snowe of Maine and George Voinovich of Ohio -- could be decisive in a Senate the GOP controls by just 51-48, plus a Democratic-leaning independent.

Republicans pushed a plan for cutting spending and erasing federal deficits by 2013 toward passage by the Senate Budget Committee on Thursday despite Democratic objections that it would cut taxes too deeply.

Led by chairman Sen. Don Nickles, R- Ponca City, the panel swatted down Democratic amendments aimed at reducing the $1.3 trillion in tax reductions that the fiscal blueprint would accommodate. In one vote, the committee by a 11-9 margin rejected a proposal to block most new tax cuts and spending until President Bush clarifies the estimated costs of a war with Iraq.

In January, Bush proposed a $726 billion plan whose centerpiece was the elimination of taxes on corporate dividends. The White House has cast the package as a crucial step to jump-starting the economy, creating jobs and nurturing long-term economic growth.

Citing "international uncertainties and debt and deficit projections," the letter to Senate Majority Leader Bill Frist, R-Tenn., and Senate Minority Leader Tom Daschle, D-S.D., said any tax reduction passed this year "must be limited to $350 billion." Anything over that amount must be paid for by savings from elsewhere in the budget, the lawmakers wrote.

[hobbes1]

rather..campaigning For reelection

[kcvl]

John McCain
241 Russell Senate Ofc. Bldg.
United States Senate
Washington D.C., Washington DC 20510
Phone: (202) 224-2235
Fax: (202) 228-2862

http://mccain.senate.gov/index.cfm?fuseaction=Contact.Home

[dfwgator]

One of the problems with selling tax cuts is that they are mislabled. What we want is a cut in the marginal tax rates. But the media incorrectly portrays this as "tax cuts." As Reagan showed, cuts in marginal tax rates actually increase the amount of tax revenues the government collects.

[mdwakeup]

Tax cuts are not a 'cost', and do not carry a 'price tag', G-dammit! The Republicans need to fight this concept everytime it is said.

Actually, as long as we don't cut spending, tax cuts do have a cost. This is because they result in the government having to borrow, either from the Social Security surplus or from the public (i.e., bonds). Add the interest associated with that borrowing and they have quite a cost.

[mdwakeup]

Breaux does not support the President's dividend proposal. He signed a letter dated yesterday that committed himself and the other three signers to support no more (and no less) than $350 billion in tax cuts for consideration under the reconciliation (think fast track) process. When you look at the scores that the Senate works with, that means that they will be supporting accelerating the upper-bracket rate cuts, accelerating the marriage penalty relief, accelerating the increase in the child credit, accelerating the widening of the 10-percent brakcet, and increasing the amount of small business investment that would qualify for immediate write-off.

[xrp]

"Republican" Governor Sonny Perdue of Georgia also set about seeking to raise taxes. Albeit 'sin' taxes, only tobacco and liquor, and he did some budget cutting, BUT there is room for more.

Now where are the people who say that there are major differences between Republicrats and Democrans?

[Lancey Howard]

Those disgusting scumbags Snowe and Voinovich better be made to pay dearly by the Republican leadership.

[Lancey Howard]

Actually, as long as we don't cut spending, tax cuts do have a cost.

Sure, in a crazy, perverse, roundabout, silly kind of way.
Nah.... Actually, tax cuts do not have a cost.
It is still the spending that "necessitates" the borrowing, which increases interest on the debt. Plus, it has been demonstarted time and again that tax cuts INCREASE total revenues to the government. So no, not even in a crazy, perverse, roundabout, silly kind of way do tax cuts have a "cost".

[mdwakeup]

Plus, it has been demonstarted time and again that tax cuts INCREASE total revenues to the government.

Really? Just where was this demonstrated? Some seem to think this is what happened in the 1980s, but William Niskanen, David Stockman, Stephen Moore, and Bruce Bartlett would all disagree. The Heritage Foundation has the most generous dynamic scoring model I've seen, and even they conclude that the Bush growth plan (which would cost $726 billion by Bush's own estimate) would still reduce revenues over the next 10 years by $275 billion. And neither Bush nor Heritage takes increased interest payments by the government into account.

[Lancey Howard]

William Niskanen, David Stockman, Stephen Moore, and Bruce Bartlett would all disagree.

Well, let me go check out the credentials of these fine, non-partisan economists, and I'll get back to you. (I know who Stockman is, and if Bartlett is from 'Bartlett and Steele', I'll know what you are and I can just laugh and move on.)

[mdwakeup]

Let me save you a little work. Stephen Moore is head of the Club for Growth. Bruce Bartlett is not the Bartlett you're thinking of. He's been in either the Reagan or Bush41 Administration or both. You can find his work at townhall.com or at National Review. And Niskanen was one of the intellectual godfathers of the supply-siders. You can find his work at Cato.

[Libertina]

I vow limit on "moderates".

[Lancey Howard]

Thanks for the information about those people.
But they are playing with themselves if they oppose tax cuts.

Regards,
LH

[kcvl]

lol!

[mdwakeup]

Do you always read way more into things than is actually there? I never suggested they were against tax cuts. I never suggested I was against tax cuts. The point is that the tax cuts ain't free if they don't cut spending, too.

[Lancey Howard]

The point is that the tax cuts ain't free if they don't cut spending, too.

Point taken.
However, tax cuts must never be contingent on spending cuts or we would NEVER have any tax cuts. Cut taxes, starve the beast, and thereby FORCE spending cuts. It's the only way spending cuts happen. The only way.

Regards,
LH

[epow]

Cut taxes, starve the beast, and thereby FORCE spending cuts. It's the only way spending cuts happen. The only way.

I agree in principle, but it never seems to work out that way. Reagan's cuts certainly resulted in much greater total revenue, but political reality forced him to submit ever increasing budgets that more than ate up the revenue increases. Then Tip O'Neil and George Mitchell tacked on a couple of hundred billion more each year and deficits ran out of sight by the time Reagan had to leave.

As long as a majority of voters pay little or no taxes there is no hope of ever starving the beast IMHO. We need a flat tax for EVERYONE with no exemptions for low income earners, and we need it NOW.

[mdwakeup]

Now we get into the hard part. Where would you cut? If you have ideas, a lot of people would love to know.

[gulfcoast6]

Maybe we should start emailing them the message 'one at a time'.