WASHINGTON —
The Concord Coalition today praised a bipartisan group of U.S. Senators for
proposing to offset the revenue loss from a one-year extension of three expiring
tax breaks. The proposal by Senators Snowe (R-ME), Baucus (D-MT), McCain (R-AZ),
Breaux (D-LA), Chafee (R-RI) and Lincoln (D-AR) would extend through 2005 the 10
percent bracket inflation adjustment, certain “marriage penalty” provisions and
an enhanced $1,000 child tax credit. The revenue loss would be offset by closing
WASHINGTON —
The Concord Coalition today praised a bipartisan group of U.S. Senators for
proposing to offset the revenue loss from a one-year extension of three expiring
tax breaks. The proposal by Senators Snowe (R-ME), Baucus (D-MT), McCain (R-AZ),
Breaux (D-LA), Chafee (R-RI) and Lincoln (D-AR) would extend through 2005 the 10
percent bracket inflation adjustment, certain “marriage penalty” provisions and
an enhanced $1,000 child tax credit. The revenue loss would be offset by closing
corporate tax loopholes that have been targeted by the Senate Finance Committee
and by extending customs user fees.
“With the deficit expected to set a new record this year of
more than $400 billion, extending these tax cuts in a deficit neutral manner
would send a very positive signal that Congress is finally prepared to take the
deficit seriously and make some hard choices among competing priorities. Finding
offsets for these tax cuts could also act as a springboard for future
negotiations on the more substantive goal of bringing the budget back into
balance. Moreover, it would set a good precedent for the kind of bipartisan
cooperation that is needed to restore fiscal responsibility,” said Concord
Coalition executive director Robert Bixby.
“The push to find offsets is a prudent and reasonable
response to dramatically changed circumstances. These tax cuts were originally
enacted in 2001 on the assumptions that the nation would not be at war, that the
Social Security surplus could still be set aside, and that even with a $1.3
trillion tax cut the public debt would be virtually eliminated by the end of the
decade. All of those assumptions were wrong. It cannot be said that we are
‘refunding a surplus’ to the taxpayers. In 2003, the tax cuts were accelerated
to provide fiscal stimulus, but the economy now seems able to stand on its own
two feet. Since the task at hand is now to bring the deficit under control, if
Congress wants to extend these tax cuts as a matter of revenue policy, it should
make every effort to do so in a deficit neutral manner. It also makes sense to
use the loophole closings and fee extensions in the bipartisan plan to make up
for the lost revenue of extending existing tax cuts before using them to
help pass new tax cuts. It’s a matter of setting priorities,” Bixby said.
The Concord
Coalition is a nonpartisan, grassroots organization dedicated to balanced
federal budgets and generationally responsible fiscal policy. Former U.S.
Senators Warren Rudman (R-NH) and Bob Kerrey (D-NE) serve as Concord’s co-chairs
and former Secretary of Commerce Peter Peterson serves as president.
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