Tax Cuts

House Budget Committee chairman Leon E. Panetta said it well when he described the tax bill steamrollered to passage by the Democratic congressional leadership as "the first act in a surrealistic play that may have no ending."The highly respected California Democrat has long been unhappy with election-year posturing by both parties that could lead to further ballooning of the national debt. But like all too many Democrats, he dutifully voted the party line in setting up a confrontation with President Bush.

It would be fiscal folly if state legislators -- prodded by overzealous House Republicans -- rammed through an income-tax cut in Annapolis this session. The losers would be local governments, public schools, community colleges and state universities. That's where reductions would be made to pay for a premature tax rollback.Are Anne Arundel or Carroll schools getting too much money from the state? Can Baltimore County schools stand a reduction in state aid? Are Harford or Howard's school allocations bloated?

For state leaders to cut personal income taxes this year would have required them to suspend reality and ignore the sad fiscal facts confronting the state of Maryland.Legislative firebrands -- especially radical/conservative Republicans -- wanted to -- into the unknown. But key fiscal leaders and the governor finally prevailed last week in winning a sensible delay until next year.Maryland is not yet in a position to cut back on personal taxation. There is still a big structural deficit that refuses to shrink.

"Now Gov. Romney believes that with even bigger tax cuts for the wealthy, and fewer regulations on Wall Street, all of us will prosper. In other words, he'd double down on the same trickle-down policies that led to the crisis in the first place. " -- President Barack Obama in an ad released Sept. 27. This is President Obama's core message. In one way or another, he says it all the time. It's his kicker on the stump. You cannot watch an interview with the president or one of his subalterns without hearing it. And yet, I don't think I've ever heard a TV interviewer, host or pundit ask, "What are you talking about?"

This is the time when taxpayers start thinking about strategies to reduce next year's tax bill. But such planning is exceptionally tricky this year. Many tax cuts created in 2001 and 2003 are set to expire after Dec. 31, from historically low income tax rates to the temporary repeal of the federal estate tax. Legislators talk about extending tax breaks but can't agree on who should get them. President Barack Obama and many Democrats want to maintain tax cuts for all but the wealthiest.

The proposed Washington compromise on tax cuts and extending unemployment benefits will pump billions more in federal dollars into Maryland's and Howard County's economy, a prominent local economist says, but the bill for that short-term gain will eventually come due. "To me, this is quite bad news for Maryland," Anirban Basu of Sage Policy Group told more than 200 local business leaders gathered at an annual Howard County Chamber of Commerce economic...

Washington -- It seemed like a giant tornado went roaring through the White House last week and spun everyone around in the opposite direction.One day White House Chief of Staff John H. Sununu was on television belittling a middle-income tax cut plan offered by Senator Lloyd Bentsen, D-Tex. The next day, White House spokesman Marlin Fitzwater announced President Bush is considering something very similar.Until then, Mr. Bush has considered the defense budget so inviolable that he recently predicted it might even have to grow despite massive nuclear arms cuts.

WASHINGTON -- With support from a bipartisan majority, the House approved a $189 billion package of tax cuts for families and businesses last night, fulfilling the final pledge of the Republicans' "Contract with America."By a vote of 246-188, the House sent the tax-cut measure to the Senate, where it is likely to be scaled back considerably and folded into a budget package to be voted on in the fall.House Speaker Newt Gingrich, greeted by boisterous applause from his GOP troops, took the floor late last night to thank members of both parties for their hard work and long hours as Republicans rushed to meet the 100-day deadline promised by their contract.

THERE'S only one way out of the economic muddle created by last year's disastrous budget deal: Jump-start the economy by cutting taxes.Here's how it would work: A cut in personal income taxes -- by decreasing rates or increasing the personal exemption -- will allow Americans to keep more of the money they earn. Much of that money will be used to make purchases delayed by the hard economic conditions -- new homes, cars, refrigerators, VCRs. This will revive the moribund retail industry, which in turn, will increase orders to manufacturers, who will hire additional people to meet the rising demand.

WASHINGTON -- Americans would not see any of the tax relief promised by House Republicans until after Congress acts to balance the federal budget, under a compromise being fashioned by Republican leaders.The new proposal would delay the tax cuts promised in the House GOP "Contract with America" until after Congress adopts legislation to produce a balanced budget by 2002. Congress also would have to complete the first year of spending cuts before tax cuts would be granted.If the compromise formula is adopted, Republicans would seek to have the legislation completed this fall -- in time for the first round of tax cuts to take effect next year.