- The Washington Times - Friday, January 26, 2001

"Right now, our taxes have never been higher," Democratic Georgia Sen. Zell Miller said this week, underscoring the fact that in fiscal 2000, federal taxes exceeded $2 trillion for the first time ever. That sum also represents a 96 percent increase since 1990.
"Right now," Mr. Miller continued, "our surplus," which totaled $237 billion last year and is projected to rise inexorably throughout the next decade, "has never been greater. To me, it's just plain common sense, that you deal with the first by using the second." Thus did Mr. Miller become the first Democratic senator to endorse President George W. Bush's much-needed tax-relief package, which formed a centerpiece of his successful presidential campaign.
Mr. Miller made his argument at a press conference during which he and Texas Republican Sen. Phil Gramm unveiled the details of their tax-reduction legislation, which was based on the plan offered by Mr. Bush. Over a 10-year period from fiscal 2002, which begins Oct. 1, through fiscal 2011, the tax-relief plan outlined by Sens. Gramm and Miller would lower taxes by an estimated $1.6 trillion. (To the extent that some of the tax-relief proposals are made retroactive to Jan. 1, which House Majority Leader Dick Armey has commendably proposed as an anti-recession move, the Gramm-Miller bill would slightly exceed the $1.6 trillion projection.)
Regardless of when the tax relief becomes effective, it is important to place the $1.6 trillion in perspective. During this same 10-year period, 2002-2011, cumulative federal revenues are projected to approach $30 trillion and cumulative federal budget surpluses, based on forthcoming Congressional Budget Office projections, could approach or even exceed $6 trillion. Thus, in a period of unprecedented budget surpluses, the Gramm-Miller proposal would reduce total federal revenues by little more than 5 percent. And it would return only about 25 percent of the projected surpluses to America's overtaxed work force. Outside of Mr. Mr. Miller's fellow Democrats, including the defeated Al Gore and the now-departed Bill Clinton, one would be hard-pressed to treat this as an "extreme" proposal.
The four principal components of the Gramm-Miller proposal would lower income tax rates for all working Americans; increase the child tax credit from $500 to $1,000; eliminate the estate tax; and significantly reduce the indefensible marriage penalty, which currently forces tens of millions of couples to pay an average of $1,400 in additional annual income taxes as the price for being married.
There are now five income tax brackets, ranging from 15 percent to 39.6 percent. Phasing in their rate reductions, Messrs. Gramm and Miller would ultimately reduce the two highest brackets 36 percent and 39.6 percent to 33 percent. It's worth recalling that President Clinton introduced the two highest brackets in 1993. At the time, the federal budget deficit had exceeded $250 billion a year for three years in a row. Today, the exact opposite budget scenario prevails. The Gramm-Miller bill would also replace the 28 percent bracket and 31 percent bracket, which was introduced in 1990 by Mr. Bush's father, with a 25 percent bracket. And the proposal would add a new 10 percent bracket. The bill thus offers lower-income workers a larger percentage reduction in tax rates than it offers the highest-income earners. Also well worth noting is another fact: By the time the new rates are fully phased in, the top rate of 33 percent would still be 5 percentage points higher than the 28 percent top rate established in 1986 by bipartisan legislation during President Reagan's second term. Altogether, the across-the-board rate reductions represent about 55 percent of the total proposed tax relief.
The Gramm-Miller bill also resumes the effort to repeal the the marriage-penalty tax. Last year Congress passed a bipartisan bill that would have completely eliminated the marriage penalty within 10 years, but President Clinton vetoed it. While not going as far as Congress did last year, the Gramm-Miller bill nonetheless makes a sizable down payment on the eventual repeal of the marriage penalty. Another component important to parents is a doubling of the child tax credit from $500 per child to $1,000. Cumulatively, these two provisions alone would reduce family income taxes by more than $250 billion over the next 10 years.
Mirroring the plan Mr. Bush put forward throughout his campaign and has enthusiastically promoted ever since, the Gramm-Miller proposal would also gradually eliminate the estate tax, more appropriately known as the "death tax." Bipartisan legislation passed by Congress last year eliminated this onerous, indefensible tax, which frequently requires families to sell businesses and farms in order to pay the death tax. Once again, however, Mr. Clinton vetoed it.
Other provisions would encourage more charitable contributions and increased technological innovation by industry.
With Mr. Clinton's veto pen no longer playing an obstructionist role, some form of tax relief will certainly be signed into law this year. In the Senate, the Texas Republican and the Georgia Democrat have made an important contribution to this process. In the case of Mr. Miller in particular, by seeking to forge a bipartisan approach that recognizes which party's candidate won the presidency, he has risked the wrath of the liberal media. Indeed, no sooner had he endorsed the centerpiece of President Bush's economic policies than he was branded "a renegade Democrat" by the New York Times. In fact, Mr. Miller has demonstrated that at least one Democrat has "plain common sense."


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