- The Washington Times - Tuesday, February 6, 2001

President Bush said yesterday he wants his across-the-board tax cut backdated to Jan. 1 and warned Congress not to tamper with the proposal, vowing to "defend it mightily."
"Some in Congress view this as an opportunity to load up a tax relief plan with their own vision of tax relief," Mr. Bush said. "I want the members of Congress and the American people to hear loud and clear: This is the right size plan, it is the right approach, and I'm going to defend it mightily."
In a White House event geared toward selling the $1.6 trillion, 10-year package that he will send to Capitol Hill on Thursday, Mr. Bush said he wants to make the cuts retroactive to the start of 2001.
That would mean taxpayers could begin giving the economy a quick boost as employers reduce the amount they withhold from workers' paychecks.
"We look forward to working with Congress to expedite money to the pockets of the American people. I strongly believe that a tax-relief plan is an important part of helping our country's economy recover," he said.
Congressional Republicans said yesterday they have a consensus to pass first Mr. Bush's proposed reductions in income-tax rates which will return $727 billion to taxpayers over the next nine years. Then they plan to pursue the repeal of the estate tax and the so-called marriage penalty, as well as other tax relief.
"Pundits will inevitably focus on the big number, but the people should focus on the common-sense policies behind the number," said House Speaker J. Dennis Hastert of Illinois. "This is the right time for tax relief for the American people."
House Majority Leader Dick Armey of Texas said he was pleased that Mr. Bush supports retroactive tax cuts.
"If we can raise taxes retroactively, we can cut them retroactively," Mr. Armey said, referring to tax increases President Clinton passed in 1993. "Americans need tax relief sooner rather than later."
Congressional Democrats said they were prepared to support some tax cuts but argued that Mr. Bush's cuts are too large.
Sen. Kent Conrad of North Dakota, the ranking Democrat on the Senate Budget Committee, said his party supports "a significant tax cut" this year. "But when we look at President Bush's tax cut plan, we see, No. 1, that it is too big, that it uses virtually all of the non-trust fund surpluses."
Senate Minority Leader Tom Daschle also questioned the surplus projection of $5.6 trillion.
"Do we really want to be subjected to projections that are no more accurate than the weatherman tonight?" the South Dakota Democrat said.
But White House spokesman Ari Fleischer said the federal debt would continue to be paid down under the Bush plan faster than earlier projected.
"In fact, by some estimations, all available debt, even after our tax cut is enacted, will be paid off by 2006, virtually the end of his first term."
The president, surrounded in the White House diplomatic reception room by three Virginia families representing different tax brackets, said married couples with at least two children would receive an average $1,600 annual tax break under his plan.
"Sixteen hundred dollars will pay the average mortgage for a month. Sixteen hundred dollars will pay for a year's tuition at a community college. Sixteen hundred dollars will pay the average gasoline costs for two cars for a year. And $1,600 will buy the average California family 24 months' worth of electric power," he said, standing in front of a giant $1,600 "non-negotiable" check on an easel made out to "U.S. Taxpayer."
But House Minority Leader Richard A. Gephardt of Missouri said the Bush plan is too heavily tilted toward the wealthiest people in the income-tax brackets.
"We believe that America should not spend all of its national resources on a massive tax giveaway for the wealthiest Americans, which is precisely what President Bush's plan does," Mr. Gephardt said in a written statement.
The president dismissed such claims.
"I've heard all the talk about class warfare and this only benefiting the rich. I think when people take a good hard look at the rate reduction and who benefits and the fact that our plan … eases inequities in the tax code and that the bottom end of the economic ladder receives the biggest percentage cuts, people will come to realize it I think it's important to cut all tax rates."
Under the Bush plan, the five existing tax brackets 15 percent, 28 percent, 31 percent, 36 percent and 39.6 percent would be cut to four: 10 percent, 15 percent, 25 percent and 33 percent.
"My plan addresses the struggles of American families and respects their judgment. It doesn't tell families how to spend their money. It doesn't single out some Americans for relief while leaving others out. It's tax relief for everybody who pays taxes. That's what the times and basic fairness demand," Mr. Bush said.
"I believe it's an important principle that no American should pay more than a third of his or her income to the federal government in federal taxes… . Our tax code should not punish success at any stage of life," he added.
Although taxpayers in the highest bracket would receive back more of their money than those in other brackets, they would receive a far smaller percentage reduction.
The top 1 percent of taxpayers pay 34.8 percent of all federal income taxes, and their savings would be just 17 percent of the income-tax cuts. The top 10 percent of taxpayers account for 65 percent of all income taxes. The bottom 20 percent pay just 1 percent of federal income taxes.
On the other end of the spectrum, Mr. Bush's tax-cut plan would eliminate federal taxes for more than 7 million Americans.
"The biggest percentage gainers will be low-to-moderate income people," Mr. Fleischer said.
Support for a tax cut has increased since an endorsement from Federal Reserve Chairman Alan Greenspan, who said surplus estimates had increased so dramatically that he now thinks there is enough money to pay down the national debt and return money to taxpayers.
Growing signs of an economic slowdown and a new projection from the Congressional Budget Office that shows the federal budget surplus has grown to $5.6 trillion have also buoyed the momentum for tax cuts.
During the White House event, Mr. Bush highlighted three families from the three lower tax brackets. The Peterson family Paul, wife Deborah and daughters Sarah, 3, and Juliette, 4 months would receive a 100 percent reduction in their taxes, from $1,055 last year to nothing under the Bush plan.
"It's going to put more money into our pocket… . There's a whole raft of things I could put it toward which we desperately need," Mr. Peterson said.
Kim and Leonard Claytor, who made $73,850 last year and paid $9,506 in federal taxes, would save $2,181 under the plan a 23 percent tax cut. For John and Vivian Gordon, who made $138,667 last year, and their three children, the proposal would reduce their taxes by $3,266, a 13 percent cut.
At the end of the ceremony, Mr. Bush was asked why no one represented the wealthiest bracket.
"Well, I beg your pardon," he said, "I'm representing them. I got a little pay raise coming to Washington from Austin. I'll be in the top bracket."

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