Voinovich, for example, has staked a claim as a "leading deficit hawk in the Senate." Recently on "Meet the Press" he explained, I'm all for eliminating the tax on dividends, but it's more a part of tax reform than it is an immediate stimulus (which) is what we really need today. We need a shot in the arm to the economy, but we don't need to shoot ourselves in the foot in terms of a deficit."
While I have no doubt about the senator's sincerity, he is, with all due respect, dead wrong and profoundly misguided. It is probably no coincidence that Voinovich mentioned that he is a lawyer, which only goes to prove Justice Louis Brandeis' dictum that, "A lawyer who has not studied economics ... is very apt to become a public enemy."
To his great credit, House Ways and Means Committee Chairman Bill Thomas has stepped in to help sort out the mess created by the renegade senators.
He unveiled a $550 billion economic growth proposal last week that would reduce the tax rate on dividends and most capital gains to 15 percent or 5 percent, depending on the taxpayer's income. In addition, the bill would maintain the president's increase for small business expensing from $25,000 to $75,000; it would establish a 50 percent "bonus depreciation" through 2005 for qualifying capital investments and accelerate the marginal tax-rate reductions, among other initiatives.
There is also encouraging scuttlebutt around Washington that the Senate Finance Committee will seek to enact the president's entire dividend tax cut but phase it in over several years to accommodate the Senate's deficit phobia. Although I agree with Vice President Dick Cheney and Treasury Secretary John Snow that there is no good reason not to enact the president's entire economic growth program immediately, the Finance Committee idea and Thomas' bill are both reasonable compromises. They maintain the essence of the president's proposal while going most of the way toward satisfying the deficit obsessions of the Republican Senate.
The way should now be clear for Congress to declare hostilities on the tax bill at an end so that by Memorial Day we not only can commemorate those who gave their lives in the past for our freedom today but also celebrate the beginning of a new season and claim victory for the American worker and the American economy.