Tags: Kerry | the | Record: | The | Taxman | Cometh

Kerry on the Record: The Taxman Cometh

Friday, 27 February 2004 12:00 AM

Part 1:

The last image Sen. John Forbes Kerry wants to project is that of a classic Northeastern tax-and-spend liberal – not much concerned with giving American families control over more of their hard-earned income:

“I’m running for president to roll back George Bush’s tax cuts for the wealthy so that we can invest in education and health care,” Kerry proclaims these days in his typical stump speech. “But here’s what I won’t do. I won’t balance the budget on the backs of seniors or veterans or the weakest and poorest people in our country. And I won’t raise taxes on the middle class. Because we know the problem with this country is not that the hard-working people have too much money.”

Meanwhile, ill-fated former contender Howard Dean stuck by his guns to roll back all of the Bush tax cuts if elected, arguing that the middle class was getting stuck anyway as the cuts had merely translated into such costs as higher property taxes and higher college tuition.

Dean steadfastly maintained that the windfall from cutting the cuts could help give every American health insurance – more services at the cost of higher taxes was a good deal, or at least a lesser evil.

The Kerry campaign lambasted Dean as a sort of traitor to a great cause, saying in one statement, “Unfortunately, Howard Dean once again stated he wants to repeal the tax cuts Democrats gave middle class families at a time when middle class families are taking too many hits already.”

That’s what he says now – but what about the Massachusetts senator’s real track record on taxing and spending? Does this attractive mantle of noble guardian of the middle-class working stiff really fit?

Kerry, of course, voted against the Bush tax cuts in 2001 and 2003. He voted against eliminating the marriage penalty a dozen times. In 1993, he voted twice for President Clinton’s budget plan, which raised taxes by a history-making $240 billion. In 1998 Kerry voted against requiring a super-majority to raise taxes. He voted no to across-the-board spending cuts in 1999. He’s been greedily at the trough with the best of them, voting at least five times to raid the Social Security trust fund.

Charting out some highlights helps with the perspective:

Then in April of 2002, Kerry doubles back on himself, calling for a tax cut even larger than the one passed in 2001, telling CNN’s "Crossfire":

“It’s not a question of courage. ... And it’s not an issue right now. We passed appropriately a tax cut as a stimulus, some $40 billion. Many of us thought it should have even maybe been a little bit larger this last year. ... [T]he next tax cut doesn’t take effect until 2004. If we can grow the economy enough between now and then, if we have sensible policies in place and make good choices, who knows what our choices will be. So it’s simply not a ripe issue right now. And I’m not in favor of turning around today and repealing it.”

But by December he'd flip-flopped again, telling NBC’s “Meet the Press” that a bigger tax cut “doesn’t make economic sense.”

The news from the Kerry record on tax-and-spend is not all contrary, however:

In 2001 he did vote to reduce the marriage penalty – but as a horse trade for not cutting the marginal rates. Also that year he voted to increase the standard deduction for college tuition and student loans – but with the tradeoff of limiting the cut in the death tax to 53 percent.

Speaking of marginal rates, President Bush made reducing marginal income tax rates the centerpiece of his tax program in 2001. The 2001 Economic Growth and Tax Relief Reconciliation Act of 2001 will eventually reduce the top tax rate from 39.6 percent to 33 percent, while reducing other tax brackets by similar proportions.

On the other hand, Kerry would eliminate the 15 percent tax rate on dividends and roll it back to the new higher top tax rate, which would be somewhere between 40 and 45. Kerry would cancel the tax cuts on investor dividends and capital gains, repeal the drop in high-end income-tax rates, and overturn the planned elimination of the inheritance tax.

Some pundits, however, argue that in effect Kerry is running against successful earners, entrepreneurs and investors – people who worked their way into higher tax brackets and benefited greatly from President Bush's 2003 tax-cut plan.

Having an opposite approach, President Bush insists on lowering marginal tax rates as a way to strengthen the economy today and into the future. Lower marginal tax rates – goes the argument – help to minimize the discouraging effects of the income tax on investment, saving and work effort. Lower marginal tax rates also reduce the tax barrier to the kinds of economic risk taking – like cranking up new businesses – that produce new jobs and new technologies.

Theoretically, when marginal tax rates are relatively high, individuals with new ideas, individuals with a desire to build an economic future, and individuals who want the potential rewards of being their own boss may be discouraged from taking the risks and making the necessary investments.

Facing high marginal tax rates, they know that even if they succeed, the government will end up taking a greater share of the rewards of their efforts.

But confusing economic jargon aside, the voters seem to always choose a more simplistic tax policy approach when selecting a political leader. Recently, a poll suggested that a majority of the sampling was of the mind that Kerry as president would result in a rise in taxes.

Not good for the all-important image.

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Part 1: The last image Sen. John Forbes Kerry wants to project is that of a classic Northeastern tax-and-spend liberal - not much concerned with giving American families control over more of their hard-earned income: "I'm running for president to roll back George...
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Friday, 27 February 2004 12:00 AM
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