The Bush Tax Cut Turns One

This Week – This week’s big news revolves around the Bush Administration’s Friday announcement. The President recommended the creation of a whole new cabinet level office to be known as the Homeland Security Department. This has sent the entire Hill aflutter as everyone struggles to protect his or her turf and hopefully grab a new piece of the Homeland Security pie. The House Government Reform Committee kicks off the festivities with a few hearings this week. Since the new Department will have a broad reach, it is expected that Congress will take many months and that almost every Committee will want a piece of the action.

Legislatively this week, Senator Daschle sent tax reform advocates into a tailspin by suddenly announcing the consideration of H.R. 8 – a measure to make the repeal of the Death Tax permanent. Since he had promised to bring up the bill before the July recess the measure was expected. However, due to Senate scheduling, a final vote on the bill is expected early afternoon on Wednesday after less than 24 hours. Access our website www.cse.org for a toll free number to call your Senator and voice your support.

The House will consider two tax bills this week. The first is a resolution proposing a constitutional amendment requiring a two-thirds majority vote by Congress to move any legislation increasing taxes. More on this measure detailed below. The House will also consider a bill making the marriage tax provisions included in the 2001 Bush Tax Cut permanent. CSE will be key voting both of these important bills.

Weekly Action Item: Call or Email your Representative and let them know that you do not support tax increases. They need to vote in favor of House Joint Resolution 96!!

http://www.capitolconnect.com/cse/

Happy Anniversary!!

Last Friday America celebrated an important anniversary. June 7th marked the one-year anniversary of the Bush tax cut. The largest tax cut in a generation. It is estimated that the tax cut will help create 800,000 jobs by the end of 2002. More important than the actual tax cut, however, is the principle and debate brought about by this action.

The Bush tax cut reminded people that they have a right to their own money. You know better than anyone else how best to spend your money. You don’t need a legislator in Washington, D.C. or some bureaucrat in a backwater agency to tell you how to maximize your income. From big issues like Social Security reform or Medicare to minutia such as a bike path, policymakers like to think they are solving a problem. For some reason, however, no matter what the problem is – the answer always seems to be to spend more. They basically throw money around like drunken sailors on shore leave. But I digress. Your money is your money – while there may be some obligation to pay taxes for true national necessities – anything we can do to stem the rising tide of government spending is a needed step in the right direction.

This week the House will consider another piece of legislation that, similar to the Bush tax cut, creates the framework for an important debate. Known as the Tax Limitation Amendment (TLA), this legislation, sponsored by Rep. Pete Sessions (R-TX), would propose a constitutional amendment requiring a two-thirds majority vote by Congress to move any legislation that increases taxes. For many of us, this type of legislation makes perfect sense – why shouldn’t the government need to have the broad consensus of a two-thirds vote before it can grab more money out of our wallets? In fact, several states have already moved this type of legislation to protect their residents. But this is Washington, DC, and any time you threaten to reduce the amount of money legislators have to blow on their pork barrel spending items you touch a nerve. Therefore I do not have high expectations that this resolution will have the two-thirds it needs to actually pass. But the debate raised by this measure may be as important as the bill.

Legislation such as the TLA amendment and the Bush tax cut represent precursors to the debate over fundamental tax reform. All Americans deserve a tax system that is honest, low, and fair. Our current tax system contains none of these attributes. While we can play around at the margins – begging for every small morsel of relief such as TLA – what we really need is a wholesale eradication of our current tax system and a fresh start. Only then will we maintain some government accountability and once again create a government for, of, and by the People.