Y ou could pay more federal taxes next
because of legislation enacted by the U.S.
Senate last week.
The new rule would make it much more difficult for President Bush to extend three of his tax cuts that are set to expire this year: the phase-out of the so-called marriage penalty; raising the level of the 10 percent income tax bracket (qualifying more people for this lower tax bracket); and raising the children’s tax credit to $1,000 (it would go back to $700, meaning a $300 tax increase per child).
If these cuts are not extended, the higher tax levels would be fully reinstated in 2005. Middle-class families would be hit hard. For a typical two-income family with two children and taxable income of $58,100 in 2004, taxes would rise $1,611, or 26.9 percent, according to calculations by the Senate Republican Policy Committee.
Last Wednesday, “By a 51 to 48 vote, senators approved an amendment to the annual spending-and-tax blueprint for 2005 that would require any tax cuts to be offset by equal spending cuts or tax increases over the next five years. That barrier could only be waived by 60 votes in the 100-vote Senate,” reported The Washington Post. That would be a supermajority instead of the usual 51 members of 100 needed to pass a bill.
When votes come up to extend the tax cuts, in other words, they would have to be accompanied by equivalent spending cuts to pass with 51 votes. If there are no equivalent spending cuts, then 60 votes would be needed.
Supporters say the rule is needed to help reduce the expected budget deficit of more than $500 billion for fiscal year 2004. According to the Post, supporters call it “pay as you go” or “paygo.” It really should be called “tax-and- waste as you go” or “taxgo.”
Sen. John Kerry, the expected Democratic nominee for president, supported the new rule even as his campaign was saying he now backs cutting taxes on the middle class, another example of how he tries to have it both ways on many issues.
Yes, the budget deficit is a serious problem. But that’s because Congress has not restrained its obsession with spending; nor has Bush restrained it by issuing even a single veto of excess spending. No wonder “real non-defense discretionary outlays will rise 18 percent in his first three years in office,” according to a February study by the Cato Institute.
The House of Representatives needs to make sure it doesn’t go along with this attack on middle-class taxpayers. We urge all House members to make defeating this “taxgo” rule their top priority.