End of an Era: Tax Cuts Losing Steam on Capitol Hill

[Frodo]

Tax cuts losing force as rallying cry on the Hill:
Lawmakers say constituents wary of deficit, help for rich

By Susan Milligan, Globe Staff  |  July 5, 2006

WASHINGTON -- Support for tax cuts -- a signature campaign issue for congressional Republicans -- is waning on Capitol Hill, with the GOP-led Congress reaching its Independence Day recess with no tax-trimming victories to tout in home districts.

Senate majority leader Bill Frist last week was forced to withdraw a measure to cut the estate tax, which foes derisively call the ``death tax," because there was not enough support for it.

Income tax cuts and credits -- including an expansion of the very popular child tax credit -- are still due to expire at the end of the decade, but Congress has not been able to agree on a proposal to make them permanent. Congress also has failed to fix the Alternative Minimum Tax, which was meant to target wealthy people but which is increasingly encroaching on middle-class Americans.

Some lawmakers said their constituents, who once clamored for tax cuts, have recently begun quizzing them about the deficit and questioning whether the tax cuts were doing more for wealthier Americans than the middle class.

Senator Olympia Snowe , Republican of Maine and a member of the Senate Finance Committee, said proposals both to eliminate the estate tax and cut taxes on capital gains and dividends would help the wealthy, a fact that more of her constituents seem to emphasize as she campaigns for a third term.

``That's a misallocation of our precious resources," said Snowe, who had supported an outright repeal of the estate tax in 2001, when the country had a budget surplus, but has since modified her view. ``It's certainly a misallocation of our priorities" at a time when the nation is facing a large budget deficit and record national debt, she said.

Representative Mark Foley , Republican of Florida, said his constituents have begun to demand answers about the country's fiscal shape. ``They are asking the question -- how did you let this get out of control?" Foley said.