The Republican-proposed tax cut plan is crafted so the big revenue losses from measures helping wealthy taxpayers would kick in after 2002, the year the budget is to be balanced, a liberal research group says.
The Center on Budget and Policy Priorities, in a report released Tuesday, said that during the seven years leading to a balanced budget, almost two-thirds of the revenue losses from the $245 billion GOP tax plan, or $158 billion, would come from "family" tax relief.The center, citing figures from the congressional Joint Committee on Taxation, said the ratio will change after that. Of the $171 billion in additional anticipated revenue losses in the three years to 2005, $90 billion, or 53 percent, would come from taxes benefiting upper-income taxpayers, it said.
If Congress wants the budget to be balanced beyond 2002, "The last thing one should be doing is creating built-in large-scale revenue losses at that point," said Robert Greenstein, executive director of the center.
Rep. Bill Archer, R-Texas, chairman of the House Ways and Means Committee, released figures last week showing that 80 percent of the GOP tax cuts would go to people making less than $100,000 and 61 percent to those making between $30,000 and $75,000.
A Ways and Means spokesman strongly rejected the center's conclusions Tuesday.
"They're flat-out wrong," said spokesman Ari Fleischer, stressing that the "lion's share" of the tax breaks will go to middle-class families throughout the 10-year period. "It's unfortunate that a liberal group that supports higher taxes on all Americans would trump up incorrect numbers about our middle-income tax cut," he said.
The White House strongly opposes the size of the tax cut, with Democrats arguing that it benefits many wealthy Americans while Republicans are proposing big reductions in social programs for the poor.
The tax cut is expected to be a central issue as the White House and GOP leaders struggle over the next month to reach agreement on how to reach a balanced budget by 2002.