Posted on 03/14/2003 6:38:20 AM PST by 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.
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.
Now where are the people who say that there are major differences between Republicrats and Democrans?
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".
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.
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.)
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
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.
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