Differences in Candidates' Approaches to Tax Cuts

Differences in Candidates' Approaches to Tax Cuts

To Longmyer and Oddo, they contribute to the deficit. To Davis, they spell economic improvement.

When Stan Reid got his $200 federal tax refund check three years ago, he went to the hardware store to buy some window blinds. Buying the blinds wasn't absolutely essential, Reid said, but it was a better way to spend a couple hundred dollars than giving it to the federal government.

"They weren't critical but with the sun coming in through the window, you'd like a blind," he said. "I guess in the private sector every penny counts but in the government they can afford to blow a few pennies and still come back for more."

Reid, a Fairfax resident, supported both the 2001 and the 2003 tax cuts enacted by the Bush administration. And he'd like to see more, he added. Tax cuts are a way of invigorating the economy, he said, and they represent a recognition that the federal government should remain accountable to taxpayers and justify the programs it is spending money on.

"The onus is on the government, not the taxpayers," said Reid, who ran unsuccessfully last year for the GOP nomination for a seat on the Fairfax County Board of Supervisors.

Andrew Cooper, however, has seen value for his tax dollars. Cooper, an adjunct instructor in English at George Mason University who is both blind and diabetic, said he is a grateful recipient of government services.

"As a blind person, I can draw social security and work part-time," he said. Also, as he adjusts to a new insulin regime, he has had to call the Fire and Rescue Department to his Annandale home on several occasions.

"I feel responsible when these things happen," he said. "If you want to assess it in capitalistic terms, I'd like to not be a net drain on society. I'd like to think that I'm contributing as much or more than I get."

That's why, he said, "I don't mind being taxed by the federal government to support programs that democracy agrees on."

IN THE LAST YEAR, Virginians have heard a lot about taxes. First, the General Assembly and the Governor ended a protracted political battle by agreeing to raise some of the state's taxes to pay for state services. At the federal level, the administration of President Bush has pushed through two rounds of tax cuts, costing about $270 billion this year, and is working to ensure that they will be made permanent.

The debate has affected this year's congressional races in Northern Virginia, where tax cuts and the national economy feature prominently in candidates" platforms.

In the 11th district, incumbent U.S. Rep. Tom Davis (R), supported both rounds of tax cuts as part of a three-pronged strategy to beat the economic recession.

First, he said, the government cut taxes. "It takes money out of the government and puts it into the hands of the consumers."

Second, he said, the Bush administration worked to keep interest rates low. And third, the government devalued the dollar, Davis added.

"It makes American goods cheaper abroad and that helps our exports and that helps our manufacturing," he said. "And as a result the recession wasn't as deep or as wide as it might have been."

Davis' Democratic opponent, Annandale resident Ken Longmyer, said he would have voted against the tax cuts.

"I think Bush is trying to head back to the flat tax policy or something," he said. "People realize that they want services and that the government has to pay for them."

Instead of revitalizing the economy, he said, the tax cuts have mostly exacerbated the deficit.

"This administration is not tax and spend, they are spend and borrow from the future," he said.

Joe Oddo, the independent Green candidate in the race, said he too would have opposed the tax cuts.

"The Bush and congressional tax cuts were nothing more than a credit card advance," he said. As a result, the federal deficit has ballooned, he said. "That is brutal."

ACCORDING TO Richard Kogan, senior fellow at the Center on Budget and Policy Priorities, the nonpartisan Congressional Budget Office has determined that the Bush administration's 2001 and 2003 rounds and tax cuts is responsible for about 54 percent of the federal deficit, which now stands at $422 billion. The rest is attributable to increased spending, mostly in areas such as defense and homeland security.

"In 2004 at least, tax cuts amounted to more than all the spending increases for all sources together," he said.

But Davis said turning the economy around was more important than not running a deficit.

"The deficit is important but it's not the only thing you look at," he said. "You've got to arrest the economic downturn and that's what we did."

Also, he added, spending pressures brought about by the war in Iraq were going to push the country into a deficit anyway. And as the economy grows, the deficit will shrink over time, he said.

"You want to bring this down in a gradual way as we did in the '90s," he said. "What you worry about is what does this do to inflation or interest rates."

If the government were really serious about reducing the deficit, lawmakers would focus on bringing down domestic spending and, in particular, entitlement programs. "And that means revisiting Medicare, Medicaid and Social Security."

That's unlikely to happen this year, he added. "You can't have an honest discussion in an election year."

To Longmyer, however, the only way to bring down the deficit is to repeal the tax cuts for people in the higher income brackets.

"The rich are going to have to pay their fair share which they're not doing," he said.

It will take time to bring the deficit down, he added, particularly with U.S. troops in Iraq. "It has to definitely be phased in but we have to get started."

Longmyer also expressed skepticism that the tax cuts had helped spur economic growth.

"That's highly conjectural," he said. "The reason they did it I think was to get the favor of big business."

Oddo said the way to cut down on the deficit is to limit Pentagon spending.

"It's just a sieve of money to the defense contractors that are getting fat off this war," he said.