Exceptional piece, Mana...thanks!
Similar view from CJT.
=======================
ctj.org <---accompanying table
>>>Citizens for Tax Justice
1311 L Street, NW, Washington, DC 20005
202-626-3780
TUESDAY, MAY 13, 2003
CONTACT: Bob McIntyre
Senate GOP Tax Plan Targets Tax Aid to Best-off 10 Percent
The tax bill approved by the Senate Finance Committee on May 8 and scheduled for Senate debate this week would borrow $350 billion over the upcoming decade to finance still more tax reductions. More than half of the tax cuts would go to the best-off 10 percent.
A computer analysis of the Finance Committee plan by the Institute on Taxation and Economic Policy finds that over the bill’s first four years:
...More than fifty percent of the total tax cuts would go to the best-off 10 percent of all taxpayers.
...In contrast, the bottom 60 percent of taxpayers would get only 11.9 percent of the tax cuts, averaging about $100 a year over the next four years.
...The average tax reduction for the richest one percent over the next four years would total $41,117. This tiny but wealthy group would enjoy almost a fifth of the tax cuts over the four years.
“The Finance Committee offers little in the way of economic stimulus this year, but will add even more to our already huge budget deficits in the future,” said Robert S. McIntyre, director of Citizens for Tax Justice, which released the analysis of the plan. “Its main purpose seems to be to lock in the unaffordable 2001 tax rate cuts by making them take effect now rather than when it becomes even more obvious that they are unaffordable.”
The Senate Finance Committee tax bill would:
• Accelerate the reductions in the top four tax rates enacted in 2001, making them effective in 2003, rather than partially in 2004 and fully in 2006, at a cost of $74 billion over four years.
• Accelerate the expansion of the size of the lowest, 10 percent tax bracket to 2003, rather than 2008 and index it for inflation after 2003 ($44.8 billion over eight years).
• For married couples, make already scheduled increases in the standard deduction and the level at which the 25 percent tax bracket begins effective starting in 2003 rather than phasing these changes in by 2009 or 2008, respectively ($51.4 billion over seven years).
• Increase the per-child tax credit to $1,000 in 2003, rather than phasing in the increase by 2010 ($89.8 billion over seven years).
• Temporarily increase the alternative minimum tax exemption, in 2003-05 only ($49.3 billion over three years).
• Starting in 2004, exempt from taxation the first $500 in dividends for single taxpayers, and the first $250 in dividends for married taxpayers ($500 for couples). Taxpayers with
dividends greater than those amounts could exempt 10 percent of the excess in 2004 through 2007, and 20 percent of the excess in 2008 through 2012. The nine-year cost of the tax cut on dividends would be $80.5 billion.
• Expand business tax write-offs by $23.4 billion over ten years, close various tax shelters and loopholes to raise $63 billion over ten years, and increase customs fees and excise taxes by $17.9 billion over ten years.
The bill would also provide $20 billion in aid to state governments this year, offset in part by $1.8 billion in reductions in spending on SSI and SCHIP over the next decade.
–000–<<<
===================
"Senate Approves Tax, Economic Growth Bill"
tax.cchgroup.com
tax.cchgroup.com
>>>May 20, 2003
Grassley, Thomas to Begin Deliberations on Tax Package
The two chairs of the taxwriting panels are slated to sit down together informally on May 20 to begin hammering out a tax package that will include a 100 percent dividend tax cut and most likely jettison a controversial $35 billion revenue raiser. The arrangement followed an early evening meeting between Congressional Republican leaders and President Bush at the White House on May 19.
The hastily called meeting, initiated by Bush, was necessary to forestall attempts by House Congressional leaders to abandon a conference committee on The Jobs and Growth Tax Relief Reconciliation Bill of 2003 (HR 2) and, instead, to amend the bill to their liking and pass it back to the Senate, and possibly push the completion date back to the July 4 recess instead of the Memorial Day target date advanced by the president. House Republican leadership aides said House members were unhappy with the prospect of being limited to a $350 billion tax bill due to a promise made by Senate Finance Committee (SFC) Chairman Charles E. Grassley, R-Iowa, to placate Senate moderates concerned about rising deficits.
But Bush would have none of it, according to a senior Senate Republican aide who attended the meeting. "The President was very forceful in requesting quick action by Memorial Day," said the aide. "We will move heaven and earth to get this done before we leave, as per the President's request. We see no reason why this can't be completed by Thursday night (May 22)."
The two taxwriters, Grassley and House Ways and Means Committee Chairman William M. Thomas, R-Calif., were told to put aside old prejudices regarding their respective tax bills and begin with a blank piece of paper. For the initial meeting, the "how" of getting a tax bill through both chambers would also be put aside. Although the two bills differ in cost, with the House bill priced at $550 billion, they are also "dramatically" similar, according to the aide. They both address increased business expensing, child care tax credits, marriage tax penalty relief, and accelerated income tax rates. "This is not an extremely complicated bill, "he said, adding that House leaders now understand that the Senate needs state aide included in a final bill in order to gain a majority vote. "As to the size of the package, the House would like more than $350 (billion) but it understands Grassley's promise."
The Grassley bill calls for a 100 percent dividend tax-rate reduction for three years, whereas the Thomas plan, over a longer stretch, would reduce taxes on dividends and capital gains by 15 percent for most taxpayers. But melding the two plans may not be that difficult, according to the aide, who suggested that incorporating the cost of the Thomas capital gains cut with a 100 percent dividend tax cut, was not that expensive a proposition, especially if the cuts are only temporary. "There are many ways in which both plans can be encapsulated," he said.
As to Grassley's $35 billion revenue raiser, reinstating the tax on foreign earned income up to $80,000 (Code Sec. 911), it is unlikely to survive, according to the aide, who hinted that Bush wanted it removed.
The Senate also named conferees to the bill, including Grassley, Orrin Hatch, R-Utah, Don Nickles, R-Okla, Trent Lott, R-Miss., SFC ranking member Max Baucus, D-Mont., John Rockefeller, D-W.Va., and John Breaux, D-La.
House Has Few Comments
A spokesperson for Speaker of the House J. Dennis Hastert, R-Ill., could not confirm what occurred at the May 19 White House meeting. An aide to Grassley, also could not confirm what transpired at the meeting. However the latest information circulating on the House side is that a conference will be held, a House Republican leadership aide told CCH during the evening of May 19. A second aide said the final decision would be made at a House leadership meeting at 3:00 p.m. on May 20.
House Democrats Still Fighting for Influence over Package
House Democrats are working closely with their Senate counterparts to try to shape the eventual growth package, according to House Minority Whip Steny H. Hoyer, D-Md., speaking at a May 19 press conference. Their goals are to get the package to be a short-term stimulus that does not greatly add to the federal deficit, he said. Democrats also want to include aid to states and an extension of unemployment insurance in the plan, he told CCH. Extending unemployment benefits would stimulate the economy, he added. "We haven't been very successful obviously in getting in the Senate bill initially, but we will have to see what the conference is going to bode," he commented.
White House Meeting
According to White House Deputy Press Secretary Scott McClellan, President Bush's meeting with House and Senate GOP leaders to discuss the tax-cut plan was a "very positive meeting. They talked about moving quickly" on the tax-cut package and "giving a boost to the economy." McClellan declined to comment when asked if they hoped to move as quickly as Memorial Day or whether legislative procedures were discussed at the meeting. In recent public statements, Bush has urged Congress to send him a tax-cut package by Memorial Day, noted White House Deputy Press Secretary Claire Buchan.
By Jeff Carlson, Paula Cruickshank and Dave Hansen, CCH News Staff<<< |
