As part of our coverage of the 5th Congressional District election, The Herald is asking the candidates for their positions on key issues. The election is Nov. 2.
Q: Would you favor extending the Bush tax cuts? If so, please provide specifics on how you would pay for them to avoid adding to the national debt.
A. John Spratt, Democratic incumbent: To avoid any risk to the recovery, I would extend the tax cuts passed in 2001 and 2003 for one year, and decide then the impact on the economy and the budget. If this approach is not taken or available, I would extend the 2001 and 2003 tax cuts for all incomes up to $250,000.
I would extend now the estate tax permanently along lines of the bill that passed the House, including an exemption of $3.5 million per decedent, stepped up basis, full marital deduction, and annual exclusion gifts.
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I would also amend and extend the alternative minimum tax, so that it applies only to those upper bracket taxpayers for whom it was originally intended, particularly those taking maximum advantage of tax preferences.
The tax cuts passed in 2001 and 2003 diminish revenues by $3.8 trillion over the next 10 years. That impact can be limited and offset if extensions are kept short-term.
There will for sure be a final vote on the 2001 and 2003 tax cuts before this year is out, because these include expiring cuts and credits that range from the estate tax and the capital gains tax, to the child tax credit, earned income credit, and 10 percent bracket. In addition, the alternative minimum tax must be amended this year or it will tax 25 million taxpayers, most of them unintended.
A. Mick Mulvaney, Republican challenger: We should absolutely extend the tax cuts. Raising taxes at any time hurts our pocketbooks; raising them in a recession could devastate our economy.
As to how I would "pay" for the extensions, I respectfully reject the premise of the question. Not extending them will "cost" much more than keeping them in place. It will "cost" a typical S.C. family several thousands of dollars each year, and it will "cost" jobs in an area already struggling under high unemployment. People in South Carolina have been learning to get by with less for the last two years. It is time for the government to do the same.
I understand that Mr. Spratt now says that he supports extending some of the tax cuts until after the next election. One can only wonder if a tight re-election race convinced him to reverse course from 2001, 2002 and 2003, when he voted against these same taxes.
Unfortunately, his words still don't match his actions. Just this week Congress, led by Nancy Pelosi, voted to go home without even taking a vote on the tax extensions. Thirty-nine other Democrats had the fortitude to stand against her. John Spratt supported her. The vote was 210-209. Once again, his vote could have made all the difference.