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Tackling Tax Cuts

A report on the tax debate in the House of Representatives that ending with the passage of a Republican bill that extends the 15 percent tax rate for income on capital gains and dividends.

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  • KWAME HOLMAN:

    In recent weeks, the Republican majority in the House of Representatives has voted to shave federal spending on social programs such as Medicaid, student loans and food stamps.

    And so today, when House Republican leaders made their push for a $56 billion package of tax cuts on investments, Democrats declared war. Massachusetts's Ed Markey came armed with props.

  • REP. ED MARKEY:

    They cut the poorest, they cut the most vulnerable, they cut the youngest, and where does the money go? The money goes to millionaires.

  • KWAME HOLMAN:

    The Republican bill would extend the 15 percent tax rate for income from capital gains and dividends for two years beyond their current expiration date of 2008; both were cut substantially in 2003.

    Florida Republican Adam Putnam argued that all working Americans, not just the wealthy, would benefit under the plan.

  • REP. ADAM PUTNAM:

    Everybody's got a shot at paying less in taxes on capital gains. Everybody's got a shot at paying in less in taxes on dividends that are paid by companies that support all Americans. Everybody's got an opportunity to go to college through the tax incentives that are in there for higher education opportunities. Everybody's got an opportunity to achieve home ownership through economic polices that keep interest rates low and inflation in check.

  • That’s the difference:

    An opportunity for each and every individual according to their own merits and their own hard work and their own character and their own ability to get out there every day to do it, and the other side's proposal to pick and choose the winners in our society.

  • KWAME HOLMAN:

    Democrats offered their own plan, which did not include the capital gains or dividend extensions, but would still would cut taxes by $43 billion, offset with a tax increase on individuals earning $500,000 or more and couples earning $1 million or more. New York Democrat Charles Rangel was its sponsor.

  • REP. CHARLES RANGEL:

    What I'm suggesting to you, that the major decisions of those of you that will have to vote is whether you want to take the good things that we could find in this bill, not increase the deficit and not cut the programs for the poor, and have a Democratic substitute that makes sense to the American people and hopefully to the House of Representatives.

  • KWAME HOLMAN:

    Republicans railed against that plan. Jeb Hensarling of Texas:

  • REP. JEB HENSARLING:

    Americans will receive a most unwelcome Christmas gift from the Democrats, a huge automatic tax increase. This will cause families billions of their dollars and jeopardize millions of their jobs. We cannot sit idly by and let the Democrats do this.

  • KWAME HOLMAN:

    Unlike yesterday, when the House almost unanimously voted to ease the impact of the alternative minimum tax, the chamber today was sharply divided. The Democrats' alternative was defeated along party lines and the majority moved towards approving its own plan. California Republican David Dreier:

  • REP. DAVID DREIER:

    Well, the fact of the matter is we're encouraging investment with this. We want to do everything that we possibly can to make sure that those people who are out there creating jobs have the incentive to do that.

  • KWAME HOLMAN:

    At that point, Georgia Democrat John Lewis said Republicans should be embarrassed.

  • REP. JOHN LEWIS:

    It is unbelievable that they're doing this during this season, the holy season. It is unreal. This season of all seasons you would think they wouldn't have the audacity, the gall, to pass such a disgraceful and shameful piece of legislation. Oh, but they do.

    Where's our compassion? Have we lost our way? How long, but oh, how long will we continue to take care of those at the very top and not those in the middle and those at the very bottom? How long? But oh, how long? This bill is not fair. It is not right. It is not just. As a nation and as a people, as a Congress, we can do better.

  • KWAME HOLMAN:

    The impassioned speech didn't appear to change any votes. In fact, the Republican plan even attracted nine Democrats. Republicans prevailed.

    The battle now will be with the Senate where a few Republican moderates already are on record as opposed to extending the capital gains and dividend provisions.

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