By: Mary Mostert, Analyst, Banner of Liberty (www.bannerofliberty.com)
Editor's Note: March 9, 2001 - Although the Democrats are SAYING they support a tax cut, but they just don't like President Bush's tax cut, the fact is, they don't like tax cuts. The article below briefly summarizes the repeated passage of tax cuts that were opposed to the bitter end by Bill Clinton, and the Democrat leadership in Congress, Rep. Dick Gebhardt and Sen. Tom Daschle. Yesterday, we heard this same class warfare thinking again.
Mary Mostert
Published: August 7, 2000
The Seven Year Budget Reconciliation Act, HR 2491, introduced by Rep. John Kasich, (R-OH) passed by a vote of 245 yeas to 192 nays on November 20, 1995. It was opposed by most Democrats and vetoed by Bill Clinton. Even people who pay little attention to what the government in Washington, D.C. is doing, remember the budget debate and the claim that HR 2491 was a "tax break for the wealthy." Bill Clinton vetoed it, the new Republican majority stood firm, and soon the government found itself running out of money.
It was during this crisis of government that Bill Clinton and Monica Lewinsky had their first sex tryst in the Oval Office and it was during this time that the efforts by the Republicans to balance the budget were under the most vicious attack. There was a daily drumbeat about that "$245 billion tax break for the wealthy" on the floor of Congress and in the media and from the White House.
Rep. Eva Clayton was one of the 192 Democrats who voted against that bill saying on November 17, 1995:
"The budget bill we just passed gives a hand and a handout to the well-connected and well-off and uses a fist and brute force against the poor and many of those who work in America."It provides for drastic and extreme changes in the lives of our citizens, and it does so through a process that was not open--a process that evolved in the dark shadows of smoke-filled, back rooms.
"The Republicans would have us accept that Secret Report so that they can glide to a balanced budget in 7 years--But, `to balance' means `to equalize'. And, we will not equalize, when we give a $245 billion tax break to the wealthy while Student loans are cut, nutrition and child care are compromised, farm programs are thrown out the window, spending for needed housing programs is reduced, and Medicare and Medicaid are slashed."
Rep. Edward Markey said on the floor of the house on January 4, 1996:
"Mr. Speaker, yesterday the budget negotiators finally got to the key issue in the budget debate: whether or not we are going to provide a $245 billion tax break largely for the rich in this country as part of the 7-year balanced budget plan. "The Republican Party considers the tax cut for the rich to be the crown jewel in their Contract With America, and they have promised to keep the Government shut down until we give this tax break to the rich. The crown jewel is a good metaphor, for without the tax cut for the rich, the contract will not sparkle, it will not shine. But it is a jewel at a great price. To pay it, we must cut student loans, we must slash Medicare, we must cut Medicaid, we must slash environmental programs."
Only, I had read the mammoth bill and discussed it with the White House Budget Office asking a simple question: "Where IS this $245 Billion tax break for the wealthy that the President and the Democrat members of Congress are talking about?" They couldn't tell me. I pointed out that THEY were the budget office, and ought to be able to give me the Title, Subtitle and Section in HR 2491 that supposedly gave this "tax break for the wealthy." They couldn't, neither could any of about a dozen members of Congress that I called who talked about the "tax break for the wealthy" in the Budget Bill on the floor of the House.
There was only one provision in that bill that would generate over $200 billion in tax breaks. It was Title XI, Subtitle A Family Tax Credit, Section 11001-CHILD TAX CREDIT. which read: `(a) There shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to $500 multiplied by the number of qualifying children of the taxpayer.
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Parents who made up to $55,000 each were eligible, with a reduction in the credit thereafter. The next provision in that bill vetoed in 1995 by Bill Clinton was Section 11002 Reduction in the Marriage Penalty.
With Clinton's veto, both were scrapped. The Child Tax Credit bill was re-introduced by Rep. Kasich in a smaller budget bill, HR 2014 on June 24, 1997. On June 26, 1997 it was passed again, by the 105th Congress, on a vote of 253 to 179. A total of 226 Republicans, voted for the bill, along with 27 Democrats. The rest of the Democrats voted against the bill. By the time the bill was passed by the Senate - 80-18, it had gained so much public interest that the conference bill was passed by a huge, 389-43 veto-proof vote. The man who hopes to become Speaker of the House if the Democrats win this fall, Dick Gephardt (D-MO) and both of the Kennedys of the House, Joseph of Massachusetts and Patrick of Rhode Island, opposed passage to the end.
Confronted with a veto-proof majority, of course Bill Clinton signed the bill and now takes credit for its passage.
In the 106th Congress, HR 4810, the Marriage Tax Penalty Relief Reconciliation Act was again introduced, by Rep. Bill Archer (R-TX). It was passed in the House on July 20th with a vote of 271-156. No Republicans voted against it. A total of 219 Republicans, 51 Democrats and 1 independent (Rep. Goode) voted for it. It was passed in the Senate, in its final version, on July 21, 2000 with 60 yeas and 34 nays.
HR 4810 would have been a start towards undoing the liberal Democrats long term legislative attacks on marriage and the family in America. According to an article in the August 21st New York Times, written by David Riemer, Milwaukee director of administration for the Wisconsin's welfare replacement program, it is only one of about 63 marriage penalties which have been written into the law over the years by Democrat congresses.
Riemer explained that the Earned Income Tax Credit, which is an entitlement in which low income parents are GIVEN money, rather than the government TAKING money in the form of taxes, often is a major marriage penalty:
"Congress has agreed on a plan to eliminate the `Marriage penalty' long embedded in our tax laws--the tax advantage that the Internal Revenue Code now confers on couples who choose to live together outside marriage, or who get divorced. The House has voted to double the standard deduction and the ceiling on the 15 percent tax bracket for married couples, and the Senate is expected to follow suit. ..."The earned-income tax credit pays workers a maximum of $2,353, or $3,888 if the worker has two or more children, but this payment is gradually reduced once earnings increase above $12,690, going down by 16 to 21 cents for each extra dollar earned. The credit phases out entirely at $27,432 in earnings, or $31,152 if there are two or more children.
"The marriage penalty arises because the tax credit calculations use family earnings, not individual earnings. If a single mother lives with her boyfriend, his wages aren't included in figuring her tax credit, since he is not officially a part of her family. Should she marry him, their real joint income will stay the same, but her official family earnings will rise, and her tax credit will go down or disappear.
"The earned-income tax credit's marriage penalty can be huge. Imagine a young woman and the father of her own children, living together as one household, unmarried but hoping to wed. She earns $12,000; he earns $20,000. Under the tax rules, her credit is the maximum: $3,888.
"If they marry, the mother's `family earnings' will rise from $12,000 to $32,000. Her credit will go from $3,888 to zero--a big loss of income for a couple of such modest earnings."
On Saturday, August 5th, 2000 President William Jefferson Clinton again vetoed a bill eliminating the Marriage Penalty, calling it a "tax giveaway" and offering the bizarre notion that equalizing taxes for the married and the unmarried who live together is somehow a "fiscally reckless tax strategy" that would threaten the economy.
What Senator Patrick Moynihan and other Democrats want is an EXPANSION of the Earned Income Tax Credit, which financially rewards young couples who do not marry by allowing them to keep getting their government checks even if they marry and together earn enough money to comfortably support their children. In discussing the Marriage Penalty, Sen. John Ashcroft, (R-MO) said during the debate on the bill:
"Our Tax Code is at war with some of the fundamental values and attributes and characteristics in our culture. I think it is wrong for our Government to be attacking the very institution in society which provides the best support for what we otherwise achieve governmentally. Someone far more wise than I said it first when they said the family is the best department of social services, the family is the best department of education, the family is the best department of health and welfare. One would think if the family were doing this job and doing it well and relieving Government of its backstopping responsibility in these places, we would want to encourage the family; we would want to support it; we would want to sustain it; we would want to provide incentives for it rather than a penalty."
Of course, if the Democrats' plan to continue the Earned Income Tax Credit for the young couple who had reached the magic $31,152 a year cut-off for the credit, it would NOT reduce the Marriage Penalty. It would EXPAND the Marriage Penalty, since young couples who don't marry BEFORE having children will be rewarded and couples who marry and THEN have children will be penalized for their decision.
Somehow the Republicans determined effort to eliminate the marriage tax has been labeled a "tax break for the wealthy" just as the bill to balance the budget back in 1995. Senator Edward Kennedy (D-MA) said in the floor debate on July 21, 2000:
"This so-called marriage penalty tax break is a sham. Democrats strongly support eliminating the marriage penalty in the tax laws, and our Democratic alternative will do that. But less than half the tax breaks in the phony Republican bill are actually directed, as the Senator from New York pointed out, at the marriage penalty."Once again, our Republican friends are using an attractive label like `marriage penalty' as a cover for unjustified tax breaks for the wealthy at the expense of urgently needed priorities, such as prescription drug coverage for our senior citizens.
"The Republican trillion dollar tax breaks for the wealthy mean: No Medicare prescription drug benefit for the Nation's senior citizens; no new teachers for the Nation's schools; no increase in the minimum wage for the Nation's hard-working, low-wage workers; no protections for patients across the Nation facing abuses by HMOs; nothing to make the Nation's schools or our neighborhoods safer.
"This tax break for the wealthy is a giant step in the wrong direction for America. President Clinton is right to veto it."
In 1995 President Clinton told us, in effect, that anyone who had children was wealthy, since it was the $500 per child tax credit that was the actual source of over $200 billion of the $245 billion "tax break for the wealthy" in the 7 Year Budget Reconciliation Act. Now we learn that it is not just having children that gets you into the Democrats' "wealthy" category. All you have to do is get married and you automatically become one of the contemptible wealthy class that needs to be more heavily taxed than regular people.
To comment: mmostert@bannerofliberty.com
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