Congress Cuts Revenue, Adding to National Debt

Congress continues along the merry path of deficit spending, with both the Senate and House passing a conference report last week that makes $70 billion in tax cuts over the next five years.

Capital gains and dividends will continue at their 15 percent tax rate -- a far cry from the marginal tax rate that most taxpayers with significant gains face. And a far cry from the marginal tax rate that many working Joes and Janes face, as well. We tax wages at a higher rate than investments.

It also affects 15 million Americans, according to news reports, by keeping them from having to pay the alternative minimum tax because of inflation. The exemption for a married couple filing jointly increases from $58,000 to $62,550. However, the bulk of the cuts go to 1 million Americans making $200-600,000 a year.

The $70 billion ceiling is imposed by Senate rules -- cut more than that and leadership has to muster more than a simple majority. So additional tax cuts will come along in another bill.

The Senate voted 54-44 for the bill, HR 4297, the Tax Relief Act of 2005.

• Three Republicans voted no: Chafee (R-RI) , Snowe (R-ME) and Voinovich (R-OH). Only Chafee is running for re-election this year.
• And three Democrats voted yes: Nelson (D-FL) , Nelson (D-NE) and Pryor (D-AR). Both Nelson's are running for re-election.
• Not voting: Rockefeller (D-WV) Specter (R-PA)

The House voted 244 - 185.

• Two Republicans and one Independent voted no: Boehlert, Leach and Sanders (I).
• Fifteen Demcrats voted yes: Barrow, Bean, Boren, Case, Cramer, Cuellar, Davis (TN), Ford, Gordon, Marshall, Matheson, McIntyre, Melancon, Peterson (MN), and Salazar.
• Four did not vote: Cardoza, Evans, Kennedy (RI) and Smith (WA).

See USA Today, Christian Science Monitor.

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