- The Washington Times - Sunday, October 19, 2003

Make no mistake: the “tax fairness plan” unveiled Oct. 13 by a prominent candidate for the Democratic presidential nomination, Sen. Joe Lieberman of Connecticut, is little more than a giant tax increase on the economy’s most indispensable growth-generating sector. That’s the small-business sector, where the vast majority of the nearly 40 million net new jobs have been created during the past 20 years. Small-business owners routinely pay their income taxes through their personal tax returns. Mr. Lieberman’s plan would clobber them.

Indeed, Mr. Lieberman’s plan would make President Clinton’s tax hike of 1993 look miserly by comparison. Whereas Mr. Clinton increased the top federal personal-income-tax rate from 31 percent to 39.6 percent, President Bush has lowered the top rate to 35 percent, which happens to be 7 percentage points above the top rate established by the 1986 bipartisan tax-reform legislation. The senator’s plan would “reset” the top two income-tax rates (36 and 39.6 percent) that Mr. Bush has lowered; then, he would add another 5 percentage points, taking the top rate to 44.6 percent.

Moreover, buried in convoluted tables that inexcusably confuse adjusted gross income (which is income before standard or itemized deductions and personal-exemption deductions are taken) with taxable income, the Lieberman plan also significantly lowers the income brackets at which the top rates apply. For example, the resurrected 39.6 percent rate begins for married couples at $150,000. Under Clinton-Gore, the 39.6 percent rate did not begin until $250,000. Mr. Lieberman’s 44.6 percent rate kicks in at $250,000. It is no exaggeration to say that the self-styled centrist has transformed himself into a Kennedyesque class warrior.

How else would Mr. Lieberman “restore fairness and integrity to our tax code”? According to the plan outlined on his Web site, “First, he would keep in place the middle-class tax cuts that Democrats forced Bush to include in his packages — such as the increase in the child tax credit and the elimination of the marriage penalty.”

Forced? More than anybody, Mr. Lieberman, who ran against the Bush-Cheney ticket in 2000, ought to know that the tax-relief package Mr. Bush unveiled during his campaign included a doubling of the $500 per-child tax credit. Mr. Bush also promised tax relief to two-income married couples in an effort to address the marriage penalty. Interestingly, despite Mr. Lieberman’s July 15, 2000, vote against a bill that would have eliminated the marriage penalty, the Republican-controlled Congress passed the measure. President Clinton vetoed the bill on Aug. 5, 2000, two days before Mr. Lieberman was named Al Gore’s running mate. “Had I been president of the United States,” Mr. Bush declared at the time, “I would have signed that bill.” Mr. Lieberman voted against it.

As for Mr. Lieberman’s “middle-class tax cut,” suffice to say that applying the basic laws of arithmetic to the sloppily prepared plan could not confirm that the alleged tax cuts were anywhere near the size that Mr. Lieberman claimed. If Mr. Lieberman wants to use smoke and mirrors to aggrandize a much-ballyhooed middle-class tax cut, he could at least do so without resorting to broken mirrors.

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