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Capitol Hill Response on Tax Plan Tepid at Best
Recommendations to revamp the federal tax code formally unveiled on Nov. 1 by the President’s Advisory Panel on Federal Tax Reform have received a tepid response overall from members of Congress.
Individual reactions from bipartisan lawmakers in the House and Senate have ranged from lukewarm to outright hostile.
Here is what they have been saying in Congress:
- House Majority Leader Roy Blunt (R-Mo.) “We may have a significantly broader debate within the (Republican) conference as to what that system should look like than these recommendations.”
- House Minority Leader Nancy Pelosi (D-Calif.) “Unfortunately, President Bush's tax panel is a Trojan horse — using so-called simplification to cut taxes for the wealthy while increasing taxes for middle-class families."
- Senate Finance Committee Chairman Charles Grassley (R-Iowa) “Some of their recommendations are bound to be politically unpopular. Cutting the home mortgage interest deduction is an example. But it’s important to have a comprehensive starting point that will get everyone talking and thinking.”
- House Ways and Means Committee Chairman Bill Thomas (R-Calif.) “In a June 8, 2005 hearing, the Ways and Means Committee began to discuss the broad priorities of federal tax reform set forth by the President: simplicity, fairness and growth. The committee will continue that examination, including a close inspection of the policies suggested by the panel in the months ahead.”
- Rep. Tom DeLay (R-Texas) “Those of us who have long advocated fundamental tax reform, for decades in some cases, have reason to wonder — especially given President Bush’s well-deserved reputation for thinking big — ‘Where’s the vision? Where’s the boldness?’”
- Sen. Max Baucus (D-Mont.) “There are some great ideas here and some not-so-great ideas. If only this were a buffet. Unfortunately, it’s a set menu, and I think overall it will not satisfy our hunger for reform and simplification.”
- Sen. Charles Schumer (D-N.Y.) “This idea is an absolute killer for New York. Repealing the deduction (for state and local income taxes) would devastate people at all levels of income, from working families of modest means to the upper-middle class, but would also crush budgets at both the state and local level.”
- Rep. Robert Wexler (D-Fla.) “This will create a dramatic increase in the cost of housing for countless home owners and will have a devastating effect on our nation’s housing market. This is nothing short of a large-scale tax increase for middle-class Americans.”
- Rep. Charles Rangel (D-N.Y.) “Unfair and unwise.”
- Reps. Jerry Weller (R-Ill.) and Mark Foley (R-Fla.) “While many investment opportunities exist today, perhaps none provides more in return for individuals, families and communities than homeownership.”
- Sen. Hillary Rodham Clinton (D-N.Y.) “It is very troubling to hear that the President’s tax reform panel has recommended the elimination of a tax benefit for over 3.2 million New York families who are disproportionately burdened by high property and state income taxes.”
- Sen. Jim DeMint (R-S.C.) “These recommendations are small and quite complicated, and that’s exactly what we’re trying to get away from. We need comprehensive reform that will make America the best place in the world to invest and do business."
- Sen. Dianne Feinstein (D-Calif.) “The proposals could “trigger a devastating trend of mortgage defaults.”
- Rep. John Linder (R-Ga.) “By failing to propose fundamental reform the commission simply perpetuates the economic drag on our economy that is the American tax code — a drag that disproportionately burdens America’s working families.”
- Rep. Jim McDermott (D-Wash.) “I think it’s a trial balloon to see what happens, and I’m not impressed with it.”
- Rep. Katherine Harris (R-Fla.) “I oppose efforts that would discourage homeownership and stifle economic growth. Therefore, I urge the panel to reconsider proposed recommendations to limit the mortgage interest deduction.”
- Rep. Sue Kelly (R-N.Y.) “New York families rely heavily on the state and local income tax deduction and the home mortgage interest deduction for much-needed federal tax relief every year. Just the thought of ending these crucial deductions sends a chill through the living room of every middle-class home owner in the Hudson Valley.”
- Rep. Steve Israel (D-N.Y.) “Reducing the interest deduction is a short-sighted attempt to balance budgets on the backs of the middle class. I strongly urge the White House to reject any proposals limiting home mortgage deductions.”
- Rep. Tim Bishop (D-N.Y.) “With housing prices continuing to rise, I urge President Bush to reject any plan to lower mortgage deductions. Long Islanders are facing historic energy costs and soaring property taxes. What we need are more incentives, not disincentives."
- Rep. Carolyn Maloney (D-N.Y.) “The average cost of a home in Nassau County is over $500,000 a year. Without being able to deduct mortgage interest, some home owners may be forced to sell their homes because of an increased tax bill from the federal government. While tax reform is needed, it cannot be achieved by increasing taxes on working families.”
- Rep. Brad Sherman (D-Calif.) “In parts of the (San Fernando) Valley where home prices are more than double the national average we have a lot at stake in preserving the deduction for home mortgage expenses. This is a risky recommendation. It is tantamount to slapping middle-class Californians with a huge tax increase.”
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House Democratic Whip Steny Hoyer (D-Md.) and Rep. Rahm Emanuel (D-Ill.) “The Panel on Federal Tax Reform seems poised to make recommendations that could amount to little more than a bait-and-switch for millions of hard-working American families. For example, the tax panel recognizes the unfairness and arbitrariness of the Alternative Minimum Tax, and suggests that the AMT be eliminated. However, in return for eliminating the AMT, the panel apparently wants to cap the mortgage-interest deduction and the health-insurance exclusion, and eliminate the deduction for state and local taxes. As a result, what the panel seems to offer with one hand, it apparently wants to take away with the other. That, in our view, should not be the purpose of tax reform.”
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Excerpt from Joint Letter to President’s Advisory Panel on Federal Tax Reform “The mortgage interest deduction is consistent with America’s longstanding tradition of encouraging homeownership, which is the cornerstone of the American dream and a pillar of U.S. housing policy. We encourage you to consider other options that do not hamper the ability of our constituents to achieve the American dream, which would bring about numerous negative social and economic ramifications.” — Reps. Katherine Harris (R-Fla.), Steve Israel (D-N.Y.), Gary Ackerman (D-N.Y.), Peter King (R-N.Y.), Timothy Bishop (D-N.Y.), Stephen Lynch (D-Mass.), Ben Chandler (D-Ky.), Carolyn Maloney (D-N.Y.), Joseph Crowley (D-N.Y.), Gary Miller (R-Calif.), William Clay (D-Mo.), Dennis Moore (D-Kan.), Jim Gerlach (R-Pa.), George Radanovich (R-Calif.), Luis Gutierrez (D-Ill.), Mike Ross (D-Ariz.), Ruben Hinojosa (D-Texas), Brad Sherman (D-Calif.), Darlene Hooley (D-Ore.), Debbie Wasserman Schultz (D-Fla.).
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