Bush Tax Cut Makes 'Plain Common Sense', Says Hastert
July 7, 2008 - 7:27 PM
(CNSNews.com) - President Bush's $1.6 trillion tax cut proposal won't officially be submitted to Congress until Thursday, but the public relations effort is already intensifying.
House Speaker Dennis Hastert (R-Ill.) said Monday Bush's plan contains "plain common sense" that will provide tax relief for the American people.
According to Hastert, it's common sense that "the federal government should cut taxes for every American who pays taxes, especially as the economy slows and the federal surplus grows. What sense does it make for the federal government to take more money than it needs, when middle class families need more money for higher energy costs?"
The Bush plan calls for eliminating the inheritance tax, also known as the "death tax," and for reducing the tax penalty on married couples, who often pay more for filing joint returns than if they filed individual returns. Hastert agrees the death tax should be eliminated, but also wants the marriage penalty done away with it, not simply reduced.
"The federal government should stop penalizing people for getting married. Ending the marriage penalty is a moral imperative, not only a financial imperative. The newly married couple can use the extra $1,400 to pay for wedding expenses or to start an education fund for their future children," Hastert said.
Bush admonished Members of Congress Monday not to "load up" the tax plan with "their own vision of tax relief."
"I want the members of Congress and the American people to hear loud and clear, that this is the right size plan, it is the right approach, and I'm going to defend it mightily," the president said at the White House.
"I've heard all the talk about class warfare," Bush added, "and this only benefiting the rich. But I think when people take a good hard look at the rate reduction and who benefits, and the fact that our plan erases inequities in the tax code or eases inequities in the tax code, and that the bottom end of the economic ladder receives the biggest percentage cuts, people will come to realize it. I think it's important to cut all tax rates."
Bush was asked if he favored a retroactive tax cut.
"I do," the president replied, "and we look forward to working with Congress to expedite money to the pockets of the American people. I strongly believe that a tax relief plan is an important part of helping our country's economy recover."
The president wants his proposed tax cut to be retroactive to January 1, 2001. House Republican Leader Dick Armey (R-Texas) said he likes the idea.
"I am pleased that the president has expressed support for retroactive tax cuts. If we can raise taxes retroactively, we can cut them retroactively. Americans need tax relief sooner rather than later," Armey said.
Jim Miller, the former director of the Office of Management and Budget during the Reagan administration, believes a retroactive tax cut is a "very important" and "very good" change.
"People have a tendency to postpone economic activity in order to reduce tax liability. Making this tax cut retroactive will increase economic activity during the current year. The economy is in a slump now. The activity we want to generate is now, not later," Miller said.
However, the group Citizens for Tax Justice thinks Bush's plan would take a "huge bite" out of Social Security.
A CTJ analysis of the Bush plan said, "Over the first nine years (fiscal 2002-10), the Bush tax cuts would cost $1.8 trillion (including $265 billion in added interest costs). As a result, over the next decade, the Bush tax cuts would far exceed all reasonable projections of upcoming non-social security surpluses. That would require dipping deeply into the Social Security trust fund to pay for the Bush tax cuts.
"Gov. Bush may somehow think he can have a giant tax cut for the well-off and protect Social Security at the same time, but the figures show he's simply wrong," said CTJ director Robert McIntyre.