President Bush's income tax rate cuts serve as a good beginning to a much needed tax cut. It actually would provide a noticeable refund of tax overpayments and help stimulate economic growth. There's already some recognition on Capitol Hill that the president's tax plan needs both to be accelerated and to add items to it in order to avoid disappointing an electorate that now expects a large tax cut.
House GOP leaders are pushing several important additions to the basic tax cut, among them elimination of the "death tax," cutting the marriage tax, increasing the child tax credit and raising limits on retirement account contributions — all of which previously have passed the House, only to be vetoed or stalled in the Senate under threat of a veto.
Those are good beginnings. Typical American couples suffer a tax penalty of more than $1,000 a year just for being married, a burden that falls especially hard on newly married couples just getting started in life and on seniors who have limited incomes. The child tax credit, currently $500, would be increased to $1,000 over five years under one GOP plan — enough to make it possible for more moms to stay home with their children if they so choose. These two measures would do much to free families from undue tax burdens.
Lifting the current caps on retirement account contributions also makes sense. If, as a nation, we want people to save more for their own retirements, then regulations shouldn't get in the way. The current $2,000-a-year limit on IRAs, for instance, hasn't changed in 20 years. If the limit had kept pace with inflation, then it would be at least $5,000 by now. Last year, the House passed legislation to lift IRA and 401(k) limits by a vote of 401-0, but Clinton stopped it from becoming law.
While tending to tax cuts, Congress also ought to undo Clinton's tax increases, particularly the 1993 surtax on Social Security benefits. According to a United Seniors Association poll, a 60 percent majority of seniors support repeal of the Clinton surtax on Social Security. It's not fair to tax a benefit people paid taxes throughout their working lives to support.
President Bush's tax plan includes repeal of the "death tax" over several years. The death tax accounts for only a tiny portion of federal tax revenue but imposes huge costs and no small amount of angst upon small business families and others who have prudently saved and invested throughout their lives. The "death tax" ought to be simply eliminated immediately and many in Congress agree.
In a United Seniors Association poll, two-thirds of seniors said they are more likely to support the Bush tax plan if it includes repeal of the "death tax," and an incredible 90 percent of seniors said it is "unfair for the government to tax a person's earnings while it is being earned and then tax it again after a person dies." If that's not consensus, then I don't know what is.
President Bush's tax cut plan is encountering some political turbulence in Washington because Washington always resists tax cuts. Many are beginning to say we must cut deeper and sooner, delivering a noticeable, immediate refund of the tax surplus. Americans will rally behind a plan that provides a big supply of "fuel" to our sputtering economic engine. By accelerating his plan and adding important elements to it, the president can create the kind of momentum the economy sorely needs.
While many in Congress are asking for more, let's not lose sight of how dramatically Bush has succeeded in changing the terms of debate in Washington. It wasn't that long ago when the question was whether we should have a tax cut at all. Now we're debating how big the tax cut should be. That's a huge change for the better.
Art Linkletter, a veteran of TV, is national spokesman for United Seniors Association, Inc. Send E-mail: ArtUnitedSeniors@aol.com.