Dole To Call For A 15% Tax Rate Cut
By Candy Crowely/CNN
WASHINGTON (Aug. 5) -- Republican sources say Bob Dole's economic stimulus plan will call for a 15 percent income tax rate cut as the centerpiece of an effort to reduce taxes by about $550 billion dollars over six years.
The Republican presidential candidate is due to unveil the plan in a speech today, but details leaked out over the weekend and Democrats -- warming up for weeks -- took aim.
"If it's rumored that he's going to propose anywhere from a $5 billion to $600 billion tax cut without saying how it will be paid for specifically, then he will have reversed his own record," said White House Chief of Staff Leon Panetta. "This will be a gold medal flip-flop by Senator Dole in terms of his past record."
Dole sources counter that Dole's record as a deficit hawk make him the perfect person to propose tax cuts. They like to cite the Nixon-goes-to-China example.
A source says Dole will outline the specifics of how he will pay for the cuts in his Chicago speech. The source reveals the plan will stick with bringing the budget into balance by 2002. Sources also note that Dole will not cut Medicare beyond what is currently on the table, nor will he touch Social Security or defense spending.
To some degree, Dole will use projected economic growth to make up for lost tax revenue. But a source insists, his reliance on growth will be moderate and provable. Still, top Dole staffers expect to hear a lot of critiques using the words "smoke and mirrors" and "voodoo economics." Senior Dole advisor Donald Rumsfeld, called the plan ambitious but achievable.
Dole's plan will also call for a healthy cut in capital gains taxes, a $500-per-child tax credit and various breaks for small businesses. On the list of possibilities, but rejected by Dole in Sunday's final analysis were payroll tax deductions. Sources say Dole also wants to change the structure, scope and shape of the tax system, and will pursue that during his first year in office. But according to the source, Dole does not believe the economy can wait, so he sees his tax relief plan as a downpayment on overall reform.
As details of the plan leaked out over the weekend, the Clinton-Gore campaign said it would wreak havoc on the federal deficit.
"Bob Dole is pursuing a reckless policy that will balloon the deficit and reverse the economic progress we've made over the past three and a half years," said Joe Lockhart, the Clinton-Gore campaign's press secretary.
Vice President Al Gore also weighed in, citing a Business Week magazine article that predicted it would raise interest and mortgage rates and lower economic growth.
The plan would "blow a big hole in the deficit (reduction efforts)," Gore told a meeting of the American Federation of Teachers.
AllPolitics home page
Copyright © 1997 AllPolitics All Rights Reserved