House approves three tax cuts, mulls on a fourth one

House approves three tax cuts, mulls on a fourth one

WASHINGTON - The House of Representatives gave a green signal to three different tax cuts and is all set to allow a fourth one as well. This fourth tax cut will be debated before being passed.

These tax cuts mean that the total federal revenue has been slashed by $94.5 billion over five years. Many leaders said that these bills were necessary to keep the ball rolling in Iraq as well as help kick start the reconstruction of the Gulf Coast, which was hit by Hurricanes Katrina and Rita in August and September this year. "Today, in a bipartisan manner, Congress voted to protect 15.4 million Americans from a stealth tax," commented Rep. Tom Reynolds of New York, who proposed this legislation. He was referring to the tax cut which exempted a married couple's initial $58,000 from being taxed under Alternative Minimum Tax.

Rep. Deborah Pryce, R-Ohio was of the opinion that the major credit of today's tax cuts should go to the sound economic policies initiated by the administration, "Our economic policies have done the trick. We are in the middle of one of the strongest economies this country has ever seen," she commented. "The Senate has passed a better AMT fix that protects all of the additional 19 million citizens who would otherwise pay this tax next year," said Sen. Max Baucus of Montana. "We should strive to meet the Senate's standard on AMT now, and work together to repeal this stealth tax altogether."

However budget analysts are not so upbeat about these new bills. This is especially true since last month's budget cuts that look to save $50 billion over the next five years would do so by adding to the fees of Medicaid beneficiaries, reducing federal child-support enforcement, imposing added burden on student lenders and cutting down the food-stamp rolls.

Robert Bixby, executive director of the Concord Coalition, a group that monitors budget transactions was unequivocal in stating that it made no sense to cut the budget bills and then give it back as tax cuts, "If they want to cut taxes, fine, but they are going to have to cut spending by at least that much to help the deficit, and clearly they are not willing to do that. They have to start looking reality in the face," he commented.

Another tax cut approved yesterday was related to the Gulf Opportunity Zone proposed by President Bush. This cut was in the tune of $7.1 billion over five years. Under this Louisiana, Mississippi and Alabama would be exempt from taxes as the rebuilding effort moved on.