In what will likely be sold as fiscal sanity, but is in reality only a calculated political conclusion that
eliminating tax cuts raising taxes is more acceptable than eliminating wasteful spending, the Senate Finance Committee decided not to extend dividend and capital gains tax cuts.
Facing a stalemate over one of President Bush’s top economic policy goals, the Senate Finance Committee yesterday gave up efforts to extend deep cuts to the tax rate on dividends and capital gains and approved a $60 billion tax measure largely devoted to hurricane relief and tax cuts with bipartisan appeal.
The measure, which could pass the Senate today, marks the latest in a string of legislative setbacks for Bush, who has repeatedly called on Congress to make his first-term tax cuts permanent and has taken particular pride in the 2003 dividends and capital gains tax cuts, which are set to expire in 2008.
“The fact is, these are a confluence of challenges that require a confluence of choices,” said Sen. Olympia J. Snowe (R-Maine), who forced Republican leaders to back down on the dividends and capital gains extensions when she argued such cuts would primarily benefit the wealthy as Congress was moving to cut programs for the poor.
A confluence of challenges indeed. Perhaps she and her fellow Senators should look in the mirror to find the biggest source. But benefiting the wealthy? Sure, but they’re hardly alone. I’m not wealthy, yet those tax cuts affect me by helping me become wealthy. It’s might be helpful for the Senate to remember that I’m doing the work to make myself wealthy, not the multitude of spending nonsense they offer. Might it be better to start with spending than with taxes?
When Republicans start co-opting the economic language of Democrats, little hope remains.