Congressional Republicans will face a tough task when they try to wrap up their budget legislation for next year: how to shoehorn about $100 billion in tax breaks into a measure that can only accommodate $70 billion in cuts.
The House voted 234-197 yesterday to approve a $56.6 measure that extends the 15 percent rate on dividends and capital gains until 2010. The Senate last month passed $68 billion in tax cuts, the bulk of which would pay for preventing 15 million households from receiving a $30 billion tax increase under the alternative minimum tax next year.
The now have to vote against some of the tax breaks that they have already voted for, change the budget rules, or adopt "some of the Senate's $18.8 billion in tax increases for oil companies and users of tax shelters."
The truth of the matter is that when the budget is so tight that we are cutting health care and food stamps for the poor, and we are fighting a very expensive war, we shouldn't be cutting taxes at all. Deficit spending to finance tax cuts is fiscally irresponsible.
Hat Tip to the Tax Profs Blog.