The Washington Times reports on the parties’ competing economic stimulus plans. President Bush will unveil his plan on Tuesday, and the Democrats apparently intend to jump the gun by making theirs public on Monday.
The principal features of the Administration’s proposal, which has the backing of Congressional Republicans, will be an acceleration of the already-enacted income tax cuts and a reduction on the tax on dividends. Some staffers urged President Bush to accelerate the cuts only in the middle tax brackets, while delaying the cut in the highest bracket; thankfully, he reportedly has refused to to this.
Unlike the Republicans, the Democrats must choose among competing plans. John Kerry, Max Baucus, Tom Daschle and Nancy Pelosi all have their oars in the water. One proposal that apparently will not make the cut is Kerry’s plan for a “payroll tax holiday,” which finds some support among economists. Pelosi ruled out that idea because it would “take resources from the Social Security trust fund.” Actually, the Social Security trust fund does not exist, and Social Security receipts are simply commingled with other tax revenues. But this illustrates how the Democrats’ demagoging of Social Security over many years has limited their own policy options.
Needless to say, the Democrats are united in denouncing the Administration’s proposal to cut taxes on dividends. Expect to hear a lot of talk about “coupon clippers” in the weeks to come. The good news is that all of the debate will be about which taxes to cut, and by how much. Things could be worse.
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