Saturday, July 26, 2008

Blue Dogs support a tax hike

From Ryan Ellis with Americans for Tax Reform, in this case, writing for Heartland...

Over much stronger opposition than usually accompanies such measures, the U.S. House of Representatives has passed a bill to increase funding for veterans' education.

Such rewards for service to country are generally so uncontroversial they pass by voice vote or under expedited rules. But this one met stiff opposition, as it would pay for the benefits with revenues generated by a new surtax on high-income taxpayers. The bill passed the House on a 256-166 vote shortly before the Memorial Day break.

The new measure, dubbed the "Patriot Tax" by House Democrats, would impose a 0.47 percent surtax on taxpayers with adjusted gross income (AGI) of $500,000 or more ($1,000,000 or more for married couples filing taxes jointly).

According to the IRS Statistics of Income Division, the surtax would affect about 400,000 households. Congress's Joint Tax Committee estimated it would raise some $52 billion over 10 years.

Some observers took to calling the surtax the "Blue Dog Tax Hike," because it was only at the request of Democrats that the veterans' education bill was funded at all. Under Congress's "PAYGO" rules, any new mandatory (that is, entitlement) spending must be offset by spending cuts, tax increases, or both.

To date, the Congressional majority has chosen to enforce PAYGO by paying for higher spending with tax increases alone....

"It's pretty cynical to pass a tax increase on small business owners and tell them to simply take it because it's the patriotic thing to do," said ATR President Grover Norquist.

"If Blue Dog Democrats were so hell-bent on paying for veterans' education benefits, there are plenty of wasteful spending programs out there they could have offset it with. This tax increase shows that Blue Dog Democrats are neither 'conservative' nor at all committed to reigning in the size of government," Norquist continued.

The fate of the surtax, now on its way to the U.S. Senate, is unclear. Compared to the House, that body has shown little appetite for tax increases.


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