Out of Touch on Taxes
Congressional Democrats would rather take shots at President Bush's tax cuts than listen to their constituents.
11:00 PM, Dec 6, 2005 • By GARY ANDRES
CONGRESSIONAL DEMOCRATS might want to check in with their constituents before writing any more press releases, making further speeches or voting "no" tomorrow on legislation in the House to extend current tax policies. Sure, the class warfare harangues and soak-the-rich rhetoric make liberals swoon. But if Congressional Democrats get their way, many middle class voters and small business owners will certainly see taxes increase--their own.
Due to the staggered expiration dates of tax reductions enacted in the last five years, congressional inaction means one thing--you pay more. And guess what: extending current tax laws to avoid increases not only draws support from Americans generally--it's also popular among Democrat voters. But you would never know it based on their congressional bosses' rhetoric.
When the Senate recently passed its tax reconciliation bill (66-33), 31 Democrats followed their leaders, Senators Reid and Durbin, in voting "no"--supporting what amounts to over $60 billion in tax increases over five years. The outlook is even bleaker in the House tomorrow, where no Democrat is expected to support the legislation avoiding tax hikes.
According to the Joint Committee on Taxation, over a dozen provisions that lower taxes or provide incentives for individuals and businesses expire at the end of this year. Among these popular items are the individual deduction for state and local general sales taxes, the research and experimentation tax credit and the welfare-to-work tax credit. Others, such as the 15 percent rate on dividends and capitals gains, snap back to a higher level at the end of 2006.
So Democrat soak-the-rich rhetoric offers a false choice. The real options before Congress fall into three categories: (1) Cut taxes further; (2) Do nothing and allow certain tax cuts to expire (in effect raising taxes); (3) Extend current law, keeping taxes at current levels. (A fourth choice might be to raise taxes above pre-2001 tax cut levels, but even liberals dare not tread there.)
When voters are surveyed on the real options before Congress, some surprising results emerge. Based on the most recent American Survey, conducted by DutkoWorldwide Research, a majority (52 percent) of voters supports extending the status quo as a way to avoid tax increases, and another 28 percent favor even further cuts. Interestingly, nearly half of self-identified Democrats (49 percent) favor extending existing measures, while 23 percent favor further cuts.
You'd never know from headlines that after four years of tax cutting (Congress and the president enacted tax cut bills in 2001, 2002, 2003, and 2004), nearly 80 percent of Americans favor action to extend existing rates or reduce rates further. Consistent with those attitudes, letting tax cuts expire is the least popular option. Only 16 percent say "Congress should let tax cuts expire and have taxes increase." (And only a quarter of Democrats support this option.)
The message for Democrat leaders in Congress is that 75 percent of their constituents either want current tax policy extended or support even deeper cuts in their levies. Somehow this doesn't square with most Senate Democrats and all of the House Democrats voting against extending current laws--in effect opposing policies supported by three-quarters of self-identified members of their party.