Valley lawmakers say cuts won't help
Both Mahoning Valley congressmen voted against the bill.
By DAVID ENRICH
STATES NEWS SERVICE.
WASHINGTON -- Democratic lawmakers from the Mahoning Valley said the $550 billion tax cut that the U.S. House approved Friday would saddle the country with massive deficits and do little to help the region's economy.
The core of the tax package, which the House approved with a 222-203 party-line vote, is a sharp reduction in the taxes on capital gains and dividends. Republican leaders say that although those cuts will predominantly go to wealthy taxpayers, the cuts will help stimulate the economy by encouraging job-creating investment.
But most Democrats called the tax cuts a recipe for fiscal disaster.
"I think it's one of the most irresponsible actions that I have seen occur in the Congress in the last decade," said Democratic Rep. Ted Strickland of Lisbon. "We are simply borrowing money to give a tax cut to the richest people in our country and passing the responsibility to pay the bill on to future generations."
Meanwhile, a report prepared by the Democrats on the House Committee on Government Reform found that the Republican tax cut package would do little to benefit Mahoning Valley taxpayers.
The average 17th District taxpayer would see his taxes decline by less than $400. Half of the district's taxpayers have incomes below $40,000 and would receive an average tax cut of $153, the report said.
Many area taxpayers would see no immediate benefit from the reduced capital gains and dividend tax rates, according to the report.
Nearly four out of five taxpayers in the district haven't reported any capital gains on their tax return, while 71 percent haven't reported any dividend income. Those taxpayers wouldn't see their tax burdens decline under the capital gains and dividend tax cuts.
If it becomes law, the House bill would be a windfall for the roughly 2,600 households in the 17th District with annual incomes above $200,000. They would receive an average of $12,000 in annual tax cuts, the committee report said.
Ryan is critical
Democratic Rep. Tim Ryan of Niles, who represents the 17th District, cited the report as evidence that Republicans have the wrong priorities.
"Promoting tax cuts that most people in this district will never see is not the answer" to the country's economic problems, Ryan said. The bill is "heavily skewed toward wealthy taxpayers," he said.
Strickland and other Democrats complained that the Republican leadership wouldn't let the House consider an alternative tax plan.
The Democrats' plan would have increased the child tax credit to $800 per child and provided new tax incentives for small businesses to purchase equipment. The proposal also included an extension of federal unemployment insurance benefits.
Strickland said the Democrats' plan would have had a larger, and more immediate, impact on the economy.
"It is unlikely that people who are already wealthy will take whatever tax break they get and spend it immediately," he said. "But certainly unemployed people are likely to take what they get through their unemployment benefits and spend it tomorrow because they would need it to meet their family obligations."