Newspaper article St Louis Post-Dispatch (MO)

Tax-Cut Plan Would Benefit Families

Newspaper article St Louis Post-Dispatch (MO)

Tax-Cut Plan Would Benefit Families

Article excerpt

According to rumors emerging from the latest breakdown in budget talks, congressional leaders may be wavering in their resolve to provide $245 billion in tax relief to help families and spur economic growth. To renege on this pledge would be a major mistake.

To trade away any portion of the tax-cut package simply to cut a deal with the White House would deny families and the economy all the benefits of tax cuts in exchange for a budget that won't balance any faster. The difference will be that instead of taxpayers keeping more of their own money, the government will get more to pay for programs Americans don't want or need. What benefits can Americans expect from the tax cut President Bill Clinton is opposing? According to a respected source, during the next seven years, the congressional plan to balance the budget - with tax cuts - would increase gross domestic product $146 billion more (in today's dollars) than the same plan without tax cuts. This comes to some $1,500 a household.

Does that mean more money in your pocket? Of course it does. This same analysis shows that during the next seven years, the balanced-budget plan with tax cuts would increase real spending power - disposable income - by $1,966 a household, compared to a balanced-budget plan without tax cuts.

If Congress backs away from the tax cuts, some parts of the economy will pay dearly. For example, it is estimated that 400,000 fewer automobiles and 20,000 fewer new homes will be built if the budget is balanced without tax cuts.

Any questions you might have about the accuracy of these figures should be addressed to Clinton's Office of Management and Budget director, Alice Rivlin, or Federal Reserve Chairman Alan Greenspan.

Why? Because Heritage Foundation economists came up with the numbers by using a model of the U.S. economy employed by both the Office of Management and Budget and the Federal Reserve in making their economic predictions.

In other words, the White House knows the budget debate is as much about kitchen-table economics as it is about getting Washington's fiscal house in order. …

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