When President Bush, shortly after assuming the presidency, introduced his first round of tax relief, he had planned for the cuts to be permanent. The Democrats at the time, then holding the upper hand, insisted the tax cuts be staggered and temporary, with the result being a large tax hike in 2011 unless this problem was corrected. Earlier this year the president, with his party now controlling both the House and the Senate, looked to correct this error by making the tax cuts passed in 2001 immediate and permanent. Unfortunately, this message of stability and hope for families is once again being ignored by the rest of Washington — even by members of his own party.
During his 2003 State of the Union address President Bush stated: “If this tax relief is good for Americans three, or five, or seven years from now, it is even better for Americans today.” He said this with the knowledge that if the tax cuts passed two years ago were not enacted immediately then any economic boon for families would be minimal. In addition, if they were not made permanent, come 2011, American families would be facing one of the largest tax increases in history; average taxes would rise $1,040 per taxpayer, married couples would end up paying an additional $10 billion, and a sunset repeal of the death-tax provisions would increase taxes by $69 billion. A family of four making $36,268 (hardly “one of the rich” that detractors say would benefit from such tax cuts) will see a tax hike of over $2,000 in 2011. Overall taxes would increase by over $200 billion.
Yet inexplicably, the Republican House and Senate, both of which are drafting tax legislation this week, have taken permanency completely off the table — perhaps condemning us all to an even more repressive tax system a mere eight years down the road.
For the first time in almost fifty years the Republicans control the presidency, the House, and the Senate. For the first time in almost twenty years we have a president who believes tax relief and reform are important issues. If now is not the time for enacting full and permanent tax relief for families, when is?
There can be no credible prediction who will be president in 2008, let alone who will control the House and the Senate. Not one of the nine Democratic presidential hopefuls debating in South Carolina this past Saturday supported President Bush’s first tax cut, nor do they support this one. In fact, a number of these aspirants deceitfully call for rescinding the already passed cuts (in affect a tax increase), saying the U.S. cannot “pay” for such a tax cut at this time. Yet these same nine Democrats talk of expensive proposals, such as a further socialization of health care.
President John F. Kennedy, a hero to a number of current presidential candidates, once eloquently said that a “tax cut means higher family income and higher business profits and a balanced federal budget. Every taxpayer and his family will have more money left over after taxes for a new car, a new home, new conveniences, education and investment.” Perhaps politicians in both parties should heed President Kennedy’s advice. While those opposed to Bush’s proposals bemoan that Washington can’t currently afford a tax cut, in reality these politicians and bureaucrats would rather have American families and taxpayers foot the bill than trim government’s own bloated budget.
— Tom McClusky is director of government affairs and tax-policy monitor for the Family Research Council.