Heller Still Promoting Giuliani Tax Cut Proposals

Cross posted at Desert Beacon

Ah, the joys of living in Nevada’s 2^nd Congressional District, thereby getting a spot on Rep. Dean Heller’s mailing list! We’ve been treated yet again to one of Heller’s glossy (and franked) mailers touting his objections to taxes. The taxpayers who funded the sending of this ‘campaign piece’ are not, however, equally rewarded for mailing in the little tear-out “survey” included in the mailer – that portion says: “Place Stamp Here.”

Under the heading “Congressman Dean Heller supports Tax Relief for Hardworking Families,” we discover that:

(1) Heller “co-authored” H.R. 2734 (the bill to make the Bush Tax Cuts permanent). The bill was actually “authored” by Rep. Tim Walberg (R-MI), introduced on June 14, 2007, and has 118 co-sponsors among whom is Congressman Heller. What Congressman Heller doesn’t say in the glossy mailer is that by April 16, 2008, H.R. 2734 was a dead letter, as Dick Armey’s right wing “Freedom Works” duly noted.

(2) Heller “co-authored” H.R. 411, to make “tax relief for married couples permanent.” Here again Rep. Heller appears to confuse “co-author” with “co-sponsor.” The bill was introduced on January 11, 2007 by Rep. Mario Diaz-Balart (R-FL) with 68 co-sponsors. Representative Heller didn’t sign on as a co-sponsor until August 3, 2007. [LOC]

(3) Heller “co-authored H.R. 5105, simplifying the tax code.” H.R. 5105, was actually introduced by Rep. David Drier (R-CA) on January 23, 2008, and to date has only 12 co-sponsors. This “Fair and Simple Tax Act” is not quite as fair, nor as simple as the title implies. First, it makes the Bush Tax cuts of 2001 and 2003 permanent. Among its other provisions are (a) the establishment of a three level tax rate system of 10%, 15%, and 30%; (b) the repeal of the estate and gift tax (or, the Paris Hilton Legacy Protection Act); (c) the adjustment of the AMT to account for inflation after 2007, and makes permanent those exemptions; (d) the reduction of the maximum corporate income tax rate to 25%; (e) the reduction of the maximum tax rate on capital gains to 10%; (f) the allowance for an inflation adjustment to the basis of capital assets for the purposes of determining gain or loss; (g) the establishment of new tax-exempt accounts for retirement savings, “lifetime savings,” and “lifetime skills accounts” (privatizing Social Security, and unemployment savings accounts); the exemption of those under 65 who do not have employer paid health insurance from the adjusted gross income threshold for the medical care tax deduction; and (h) makes permanent the tax credits for increased research activities. [CRS LOC] The bill might also be titled: “The I Got Mine, You Try to Get Yours, Sucker, Act of 2008,” or the “Socialism for Corporations, Free Enterprise for Individuals Act of 2008.” Perhaps Congressman Heller just ‘forgot’ to mention the privatization of Social Security provision in this legislation?

For all intents and purposes, H.R. 5105 is former NYC Mayor Rudy Giuliani’s tax proposal from his aborted 2008 presidential campaign. [ATR-PRD]

In addition to these aborted, abortive, and otherwise legislatively moribund bills, Rep. Heller wants us all to know that, “I firmly support making the 2001 and 2003 tax cuts permanent. In addition to helping end the death tax on small businesses, which would keep $181 billion over 5 years in the hands of job-creating businesses, these important tax cuts will help spur our economy by encouraging investment.” The first problem with this statement is that tax cuts are not, and in practical terms never have been, a short-term vehicle for economic stimulus. [EPI] Secondly, its been known since 2001 that capital gains tax cuts have little, if any, impact. The Congressional Budget Office estimated that the 2001 Bush Tax Cuts could produce an increase of approximately “a couple hundredths of one percent after ten years” in the Gross Domestic Product. [CBPP] Further reducing government revenues, while running up massive indebtedness to achieve “a couple hundredths of one percent after ten years,” isn’t a formula for fiscal responsibility.

Representative Heller is also pleased to tell us that he voted against H.C.R. 312, the House version of the budget, because it included “the largest tax increase in American history,” including a tax increase for “116 million taxpayers,” and “an average of nearly $3,000 for families in Nevada.” There’s nothing all that original about these claims; they come directly from a Heritage Foundation “study” that quite predictably found “evidence” to support the contentions. The points were quickly debunked:

“This claim is inaccurate, just as the same claim was inaccurate with regard to the budget resolution the Congress adopted last year. Neither of the plans recommended this week by the budget committees include a tax increase. The House plan simply assumes the same level of revenues over the 2008-2013 period as projected by the Congressional Budget Office under its current policy baseline, which essentially assumes no change in current laws governing taxes. The Senate plan actually calls for a small reduction in revenues, reflecting its assumption that Alternative Minimum Tax relief will be extended for one year without any offset of the revenues that will be lost as a result of that extension and that a second stimulus bill this year may include a small tax cut.” [CBPP]

Taking the point a step further, there was a very good reason the proponents of the original tax cuts in 2001 and 2003 inserted a sunset provision: “It should be recalled that the President’s tax cuts expire in 2010 because their supporters deliberately designed them that way, in order to fit the tax cuts within the cost constraints imposed by the Congressional budget resolutions adopted in 2001 and 2003. While acknowledging that their real goal was to make the tax cuts permanent, supporters of those measures opted to “sunset” the tax cuts before the end of the ten-year budget window, partly in order to avoid recognizing the cost of permanent tax cuts.” [CBPP] (emphasis added)

A person could wonder how much the taxpayers might have saved on postal expenses had Rep. Heller opted not to mail out a slick vanity publication boasting of his co-sponsorship of inactive legislation, his adherence to a thoroughly debunked Heritage Foundation propaganda piece, and his adoption of the Rudy Giuliani tax proposals?