October 18, 2006

Senate Candidates Talk Taxes

Tax issues are playing a role in all of the most closely watched Congressional races this year. Republican candidates, hoping to distract attention from problems in Iraq and ethics questions on the Hill, are desperate to make voters believe that Democrats will raise their taxes significantly. Democrats calmly assure the public that their main beef with GOP tax policies are the tax breaks flowing to the wealthiest Americans, although they’re often vague on what exactly they mean.

Citizens for Tax Justice research has found that the tax breaks enacted over the past six years have been skewed towards the wealthiest Americans, so a shift towards a more balanced tax policy would certainly be welcomed. After accounting for the debt accumulated under President Bush (which we all will eventually have to pay off) only the richest one percent of residents in each state actually come out ahead under the GOP’s tax and fiscal policies.

The following is a summary of how the tax debate is being played out in specific Senate races.

In Virginia, incumbent Republican Senator George Allen has leaped on Democratic candidate Jim Webb’s comments that some of the Bush tax breaks should expire. Allen’s campaign has
“extrapolated” that this means Webb opposes all the Bush tax cuts, while Webb says tax breaks for the wealthiest families and corporate loopholes should both be reigned in. Webb also cited a report from CTJ finding some Fortune 500 Corporations pay no federal taxes at all.

Like Webb, New Jersey Democratic Senator Bob Menendez argues that he is in favor of allowing tax breaks to expire for the wealthy but is accused by his opponent of supporting tax increases for everyone. Surprisingly for a fairly progressive state, the Republican candidate, Tom Kean, Jr., supports all of the President’s tax breaks and supports full repeal of the estate tax. Kean has not fully explained how he would pay for the costs of making the Bush tax cuts permanent. For more, see the Talking Taxes
blog post on the New Jersey Senate race.

In Missouri, incumbent Republican Senator Jim Talent has accused Democratic candidate and state auditor Claire McCaskill of supporting “higher taxes for everybody” because she opposed the President’s 2001 and 2003 tax cut legislation. McCaskill has her
own plan for unpaid-for middle-class tax breaks, including a $3,000 first-time homebuyers’ credit, doubling the child care credit for middle-income families and a simplified deduction or credit for college tuition and expenses.

In Tennessee, the two candidates locked in a close Senate race are busy
accusing each other of favoring tax increases. Democrat Rep. Harold Ford, Jr. has criticized Republican candidate and former Chattanooga mayor Bob Corker for increasing the city’s property taxes by 24%, a measure Corker says was necessary because of the financial problems left by his predecessor. Corker, who was the Finance Commissioner for Republican Governor Don Sundquist from 1995 to 1996, was also accused by Ford of having played a part in Sundquist’s ill-fated (although much-needed) proposal to bring Tennessee an income tax. Corker, for his part, criticized Ford for opposing Bush’s 2001 and 2003 tax cut bills.

In Montana, Democratic Senate candidate Jon Tester says he supports making permanent expanded child tax credits and marriage penalty relief but would not vote to extend other components of the Bush tax cuts, which incumbent Republican Senator Conrad Burns supports. Burns accuses Tester of wanting to increase taxes while Tester accuses Burns of handing out favors to his allies and supporters.
Tester, as president of the state’s Senate, did support several tax increases which mostly failed to pass. Many of those measures would have lowered taxes on homeowners and small businesses and shifted the tax burden in a more progressive direction. Tester also would like to enact new middle-class tax breaks including a homeowners’ credit, a new college tuition credit, a credit for veterans and a deduction for elderly care. Tester says he would pay for these by cracking down on tax evasion (which does result in hundreds of billions lost each year).

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