Staging the battle over taxes
TEXT OF STORY
MARK AUSTIN THOMAS: President Bush today is using this morning’s op-ed page of the Wall Street Journal defend his tax cuts.
As Democrats prepare to take control of Congress the President writes that “tax relief and spending restraint are good for the American taxpayer.”
Bush said “now is not the time to raise taxes on the American people.” With few details, he also says the budget he sends Congress next month would “balance the federal budget by 2012 while funding our priorities and making the tax cuts permanent.”
The issue of fiscal responsibility is likely to be important as the Democrats take over control of Congress tomorrow. Marketplace’s Hillary Wicai reports.
HILLARY WICAI: The Democrats have promised fiscal discipline.
The next Speaker of the House, Nancy Pelosi has proposed a “pay as you go” rule. That means lawmakers would either have to cut spending, raise taxes or both to come up with the funds for any new programs.
But Robert Bixby has his doubts. He’s with the Concord Coalition a non-partisan group that lobbies for fiscal responsibility.
ROBERT BIXBY: I don’t think you can do everything that’s been promised or implied politically by the Democrats and stick to a strict “pay as you go” regime.
The Democrats have talked about more aid for college students and boosting Medicare drug benefits. That short list alone requires tens of billions.
But the biggie is middle class tax relief. The Alternative Minimum Tax or AMT was written to snag the wealthiest of taxpayers but its increasingly falling on the middle class.
BIXBY: If they don’t do anything about it they’ll probably hear it from their constituents.
But adjusting the AMT could cost the government $40 to $80 billion a year.
In Washington, I’m Hillary Wicai for Marketplace.
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