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4th District Candidates Talk Tax Cuts

Both candidates for Connecticut's 4th Congressional District support extending the Bush tax cuts, in opposition to the White House's stance.

Double dipping is never a good thing – especially when it comes to the economy.

But if Congress allows the so-called Bush tax cuts to expire on New Year's Eve that just might happen, according to some.

This summer area voters saw foreclosures increase and the state unemployment rate linger at 8.9 percent. So it's no surprise that, from shop owners in New Canaan to residents in Wilton, the economy remains issue number one for most.

"Certainly this is no time to be raising taxes," said Rep. Jim Himes (D-4) in a telephone interview with Patch last Wednesday.

Because of that the junior Congressman wants President Barack Obama to consider a two-year extension on all income brackets.

If Congress doesn't act, all the tax reductions put in place in 2001 and 2003 will expire when the clock strikes midnight on New Years Eve. If Congress doesn't act then taxes on income, dividends, capital gains, and estates will increase, according to the Joint Committee on Taxation, Tax Policy Center.

State Sen. Dan Debicella said Himes' position is merely political posturing.

"The evolution of Jim Himes' positions on the Bush tax cuts can only be diagnosed one way: his flip-flop is nothing more than a bad case of election year politics syndrome," said Debicella spokesperson Ashley Maagero. "Fairfield County families deserve clear and definitive answers like those from Dan Debicella, who has supported extending the Bush tax cuts from the beginning."

Yet, Himes' stance isn't new. Himes, together with seven other representatives, sent Obama a letter Jan. 26 urging him to extend the cuts.

"The federal government has pursued many avenues to ensure our economy recovers from this recession, but allowing the 2001 and 2003 tax rates to expire could undermine any progress that has been made," according to the letter. "Allowing these tax rates to expire during this recession runs the risk of curtailing economic expansion just when it begins to pick up and could lead to a 'double dip' recession that would result in even more hardship for the American people. "

A recent op-ed on CNN.com mirrored that sentiment.

John Avlon, senior political columnist for The Daily Beast, wrote that in taxing households where two working parents might earn a combined income of $250,000, those parents "might still find themselves struggling to stay in the stability of the upper-middle class in the expensive urban areas where they often work."

Himes, who represents a high cost of living district, said repealing the cuts now could make people more vulnerable.

"A $250,000 household income is not nearly what that income is in Maine or Nebraska," Himes said. "People get hurt by that logic, that that is rich. I represent a high cost district. "

That's good news for Dan Mulhern, owner of M Milestones in New Canaan.

"It's a very challenging environment, even in a community like New Canaan," Mulhern said. "People might not think the town is affected, but it is."

Even former White House Budget Director Peter Orszag supports extending tax cuts for at least two years. In a New York Times op-ed he said torpedoing the tax cuts would "make an already stagnating jobs market worse over the next year or two."

The White House doesn't see it that way.

Speaking in Ohio on Wednesday, Obama insisted that tax cuts for those households earning $250,000 or more expire in December. Obama favors lowering tax rates for individuals earning less than $200,000 a year.

Still, the question for Himes isn't whether the cuts should be extended, but for how long.

"It's a tough question because the longer we extend them the longer we add to the deficit," Himes said.

The non-profit, non-partisan Tax Policy Center said an extension would cost $3.7 trillion over next decade.

Graham September 13, 2010 at 12:03 PM
Across the country and in Fairfield County, most Americans opposed the healthcare bill. But Jim Himes didn’t hear us and voted yes. The stimulus? Most of us didn’t want it. Himes didn’t listen. He voted yes. Cap and trade? In Connecticut, most voters said no. In Washington, Jim Himes voted yes. End the secret ballot in union elections? Again, his constituents said no. Jim Himes voted yes. If Jim Himes does not listen to you, then you should know that you are not alone. By a wide margin, voters across the country and in Fairfield County oppose the Nancy Pelosi and Jim Himes’ position on the issues. If you want to send Jim Himes a message that he can hear, you can support his opponent, Dan Debicella, here: https://debicella.blue-swarm.com/donate. Jim Himes can’t hear us. On November 2nd, let’s turn up the volume.
David Kostek September 13, 2010 at 12:57 PM
Mr. DeMuth's arguments are changing in these comments. A few weeks ago, there was the fear-mongering that huge tax hikes were certain for everyone -- ignoring the fact that Jim Himes has been on record urging the extension of the tax cuts since day one of this debate. That line is now curiously absent from DeMuth's standard copy-and-paste attack. Why? Because, as this article makes clear, Jim Himes has been representing his constituents' interests in Washington, and been a leading advocate for both appropriate tax relief and prudent spending reductions. Jim Himes was the one identifying specific, targeted spending reductions (defense programs the Pentagon doesn't even want, huge subsidies to large agribusiness firms out West, others). Jim Himes is the one catching flak from other reps and pundits nationwide for observing that $250k is not terribly rich in much of our district. The fact that Jim Himes has been taking -- and will continue to take -- precisely the moderate positions on taxation and budgeting that we in Fairfield County expect should come as no surprise. Anyone who's heard him speak or seen any in-depth interview knows that his thoughtful, reasoned approach leads him to the decisions that are best for our towns, and for the nation at large.
Susan Rich September 13, 2010 at 05:58 PM
Mr. DeMuth, please name the source (other than Fox News) that proves your side are the marjority. "Most of us" believe life-saving bone marrow transplants should be covered by insurance, and Mr. Debicella wasn't listening then.
Tom D September 13, 2010 at 08:01 PM
If Mr. DeMuth is any indication of who is fueling the Debicella campaign, then we have every reason to believe that Debicella is wrong for this district. DeMuth has been copying and pasting comments across the blogosphere. DeMuth has been arguing that somehow Jim Himes has not listened, that he has been "left-wing," and cites somewhat wishy-washy arguments that people didn't support his votes. This is just plain wrong. The facts and coverage of Congressman Himes shows that he has addressed issues with our traditional 4th district approach - that of an independent, thoughtful, and well-informed view. Take a look at his stance on the Bush Tax Cuts, unemployment extensions and his push for a greater standard of ethics in Congress. I do not want a copy and paste Congressman, one who will copy failed ideas and failed policies and vote in lockstep with the GOP extreme to turn back the clock. This is exactly what Debicella's supporters such as Mr. DeMuth are advocating, and that is exactly what we'll get if Debicella prevails this November.
Steve Symonds September 14, 2010 at 05:46 PM
Here’s what Delaware Republican Party Chairman said to the media last night: "I could buy a parrot and train it to say, ‘tax cuts,’ but at the end of the day, it’s still a parrot, not a conservative." Let's hope that mindless genuflection at the altar of tax cuts is a thing of the past (but I doubt it). Not all tax cuts are created equal, and the impacts vary wildly. I don't agree with Debicella that all the Bush tax cuts should be retained; the millionaires and billionaires never asked for it, don't need it, and won't spend it. And when even John Boehner admits that only 3% of small biz owners fall into this category that cinches how insane it would be to continue this welfare for the rich program. But retaining the middle class tax cuts indefinitely/permanently as Himes and the D's are proposing isn't smart either. This will add trillions to the deficit starting in 2014. Want to cut taxes and help the economy? A payroll tax holiday would frankly produce much more benefit according to every economist that's taken a position on this matter. Where is Himes on this? He shouldn't vote in lockstep with the Democratic leadership either!
Joe Burke September 14, 2010 at 06:21 PM
@Steve- Himes is in favor of keeping ALL of the Bush tax cuts. It is one of the few things that I agree with him on :)
Graham September 14, 2010 at 06:23 PM
Himes is in favor of not raising your taxes until November. After November, all bets are off.
Steve Symonds September 14, 2010 at 06:55 PM
So, what spending cuts will be made to pay for these tax cuts? I'm not hearing any discussion about that. And don't tell me that tax cuts pay for themselves. Virtually every economics Ph.D. who has worked in a prominent role in the Bush Administration said that the tax cuts enacted from 2000 to 2006 did not pay for themselves. Greg Mankiw, chairman of Bush's Council of Economic Advisers from 2003 to 2005, devoted a section of his best-selling economics textbook to debunking the claim that tax cuts increase revenues.
Joe Burke September 14, 2010 at 08:58 PM
tax cuts promote spending, saving and/or investment. All of which lead to growth and ultimately jobs. Raising taxes during a recession on the group that already pays the lions share only makes sense to ivory tower economists where their models work oh so well. Part of the reason that ALL economic forecasts for the US have been revised DOWN for 2011 despite the "stimulus" (porkulus) bill is because the higher taxes will derail any semblance of recovery that we might have now.
Steve Symonds September 14, 2010 at 09:14 PM
Let's not get side-tracked into what the stimulus did or didn't do; it didn't do enough that's for sure, but Lord knows it would be far worse today had we not done even that. No one is for higher taxes. Let's target this right -- not on folks who never wanted it, don't need it, and won't spend it. And let's figure out how we're going to pay for it so that our grandkid's aren't saddled with even more debt!Extending all these tax cuts will increase the deficit by more than $5 Trillion. There is no free lunch. How is this going to be paid for? And if tax cuts generated jobs then why did the U.S. lose about about 3 million jobs during the George W. Bush administration?
Joe Burke September 14, 2010 at 11:21 PM
Before I reply to your other point, I am going to let you demonstrate how extending the tax cuts on those couples earning $250k will increase the deficit by more than $5 Trillion. Please enlighten me.
Joe Burke September 14, 2010 at 11:36 PM
just one of the many wonderful things that the stimulus bill (that Jim Himes voted for) is doing. http://cnsnews.com/news/article/75198
Steve Symonds September 15, 2010 at 12:24 AM
The reference was to ALL the tax cuts being extended permanently. It's well understood that extending the cuts for the top 2% = $700+ Billion over 10 years. Total waste.
Joe Burke September 15, 2010 at 03:14 AM
nonsense. prove it.
Steve Symonds September 15, 2010 at 12:54 PM
Here you go, from the non-partisan Tax Policy Center. http://taxpolicycenter.org/UploadedPDF/1001438-tax-cuts-debate.pdf. Turns out to be $3.7 Trillion for extending all the tax cuts...not $5T. A trillion here, a trillion there. Anyway, this paper provides a deep dive on all the budgetary impacts involved. In part: "Over the next ten years, the cumulative deficit is projected to exceed $10 trillion if current budget policies are continued. Addressing the deficit will require difficult and unpopular tradeoffs. Consider that in 2020 projected federal spending on Social Security, Medicare, Medicaid, defense, and interest on the debt will exceed 106 percent of 2020 tax revenues, according to the Congressional Budget Office. Clearly, balancing the budget will require either cutting these valued programs (to say nothing of the rest of federal spending) or tax increases. The first opportunity to confront the deficit is the impending expiration of the 2001 and 2003 tax cuts. From a budgetary perspective, the price of extending all of the cuts is steep; full extension would contribute $3.7 trillion to the deficit over the next ten years...".
Christian Camerota September 15, 2010 at 03:36 PM
That's a fairly convincing response. And it is difficult to imagine the non-extension of the tax cuts sending us back into recession, as Himes claims. If, as he says, "allowing the 2001 and 2003 tax rates to expire could undermine any progress that has been made," then it begs the question of why the heck Washington rolled out a $800 billion ARRA in the first place. Then again, one wonders how Debicella expects to pay for his own "clear and definitive answers."
Joe Burke September 15, 2010 at 04:16 PM
As you know the Tax Policy Center is a part of the Urban Center and works closely with the Brookings Institute- All think tanks. The problem is that think tanks are biased- all of them. The Urban Center and Brookings are regularly referred to as liberal or liberal leaning by the NYT, Washington Post and LA Times- hence the reason that their "independent" analysis always supports left leaning policies from economics, to income distribution, to health care. Nonetheless when we look at the analysis we find that they look at the tax cuts in a bubble-no effort is made to link spending cuts to the 10 year window that they have chosen nor have they considered the consumer spending/investment/savings impact of expiring the tax cuts. That is the best way to analyze data when you know your conclusion before you start the first paragraph. What i do find remarkable is the recognition that expiration of the tax cuts will impact the 10, 25, and 28% tax brackets the most. While this is logical given the income distribution in the country it is fairly humorous when you consider that these were "Bush's tax cuts for the rich that provided no relief for the poor or middle class". At least Himes is supporting extending all the tax cuts now -whether he is doing it because of political expediency in an election year or because the lightbulb went on- it is a step in the right direction
Joe Burke September 15, 2010 at 04:59 PM
This seems to be the bottom line in terms of how you view tax policy-from today's Washington Post- "Even as they hammer Democrats for running up record budget deficits, Senate Republicans are rolling out a plan to permanently extend an array of expiring tax breaks that would deprive the Treasury of more than $4 trillion over the next decade, nearly doubling projected deficits over that period unless dramatic spending cuts are made. " If you think it is our money then you are in favor of the tax cuts and if you think it is the government's monmey then you are opposed to them
Steve Symonds September 15, 2010 at 05:06 PM
I don't give a hang if the analysis is produced by the Manhattan Institute, Cato Institute, Hudson Institute, or Brookings....left, right, center, whatever. Let's please keep the focus on the issue -- deficit reduction. The Senate Republicans today announced an array of tax breaks that would deprive the Treasury of more than $4 trillion over the next decade, nearly doubling projected deficits over that period unless dramatic spending cuts are made. How are these tax cuts going to be paid for? And suggesting that the "trickle down" effect (consumer spending/investment/savings impact) will take care of the federal deficit doesn't pass the laugh test.
Steve Symonds September 15, 2010 at 05:15 PM
Himes' is peddling the same snake oil as Debicella. I am in favor of bringing the federal deficit under control. That's a thoroughly conservative notion. The formulation..."if you think it's our money then you favor the tax cuts and if you think it's govt money you are opposed to them..." neatly avoids the facts. How will these be paid for?
Joe Burke September 15, 2010 at 08:05 PM
"Deprive the Treasury" ?? it is our money. The only solution is tax cuts coupled with spending cuts. We must stimulate growth and reduce the size of government. You cannot tax your way out of a spending problem. Increasing taxes will increase joblessness and will push us into a deeper recession. Even Cuba gets this.
Steve Symonds September 15, 2010 at 09:05 PM
It's a direct quote from the article you cited, my friend. I'm not hearing any ideas from the GOP about reducing the size of government. I don't expect anything from the D's on that score but so far all I've heard from the R's is ZIP, NADA...just more foam at the mouth rhetoric about "how much the government is spending". Specifics, please!
Steve Symonds September 16, 2010 at 12:16 AM
We need to pick up the level of discussion on matters like this, neighbors. Don't all of us need to know how we are going to pay for an additional $4 TRILLION in the federal debt to extend these tax cuts? For heavens sake, we are in an election season and isn't this the perfect moment to pin Himes and Debicilla down on what they would cut to pay for these tax cuts...without the all too cute dodge of "well our party is still figuring that out." Baloney. What would you, Mr. Candidate, recommend? Why aren't we asking them to step up. If not know, when?
Christian Camerota September 16, 2010 at 12:32 AM
For what it's worth, the "working group" that Himes formed with Gary Peters, John Adler and Peter Welch offered up areas they'd cut within to lop off about $70 billion. The areas were somewhat general, but more specific than most have been to this point. They're worth a look. They include transportation, housing, urban development and the military construction/veterans affairs. The working group, which sounded at first like something of a ploy, actually has already made headway, too, apparently. They got a housing provision passed by the House Financial Services Committee that's supposed to save around $2 billion. http://himes.house.gov/index.cfm?sectionid=22&sectiontree=21,22&itemid=547
Steve Symonds September 16, 2010 at 01:28 PM
Not worth much, Christian. $70 billion may sound like a lot but a Trillion is an Awesome Number. According to my abacus, $70 billion is 1.75 % of $4 Trillion. Senator McConnell was quoted yesterday as identifying $300 billion in cuts and savings; that's 7.5% of 4 Trillion. The late Senator Everett Dirksen (dean of the Senate Republicans in what seems like an eternity ago when senators actually tried to work together) once said, "A billion here, a billion there, and pretty soon you're talking about real money." When it comes to being serious about cutting or saving Trillions of Dollars, we have to add some zeroes to Dirksen's budgetary homily: "$500 billion here, $500 billion there, and pretty soon you're talking about real money." I've yet to hear any serious discussions about the elephant in the room here.
Joe Burke September 16, 2010 at 02:09 PM
potential spending cuts- reduce overseas aid by 10% per year for the next 3 years, close military bases in Germany, Japan and South Korea, phase in increases in the percentage that Federal employees pay for health insurance (Congress too), add some sanity to the federal pension system for federal employees like Christie is doing in NJ, repeal the remaining stimulus money geared towards green technology and telecom, restructure farm subsidies so they function as a rainy day fund rather than an annuity, freeze budget increases for ALL Federal Departments and freeze all wages immediately, mandate budget cuts in ALL Federal Departments beginning in 2012. That is a start- Eric Cantor has a website with some ideas as well http://republicanwhip.house.gov/YouCut/ We also need to make cuts in CT- we now have the largest per capita budget deficit in the country
Steve Symonds September 16, 2010 at 02:19 PM
Thanks, Joe. You have some interesting ideas here. I went to Cantor's site and it struck me as mostly filled with the usual gimmicks and pay-backs, nickels and dimes.
Joe Burke September 16, 2010 at 02:42 PM
check out Dan Henninger's column in today's WSJ- he notes that the movement to shrink the federal government is not new and dates back to at least 1992 when Perot ran.
Steve Symonds September 16, 2010 at 03:10 PM
OMG, the pull-and-tug about the role/size/scope of the Federal government goes back to the beginning of this nation. You read the Federalist Papers and see how so many of the debates "back in the day" are still topical. One of the wonders of our country is that we have a system of government that encourages/requires reinvention of our basic political processes and institutions in light of changing circumstances...and that the framework/foundation is resilient enough to accommodate changes without melting down (well, so far anyway). But it is way messy. I worked on Capitol Hill for several years and that old saw about "there are 2 things you never want to watch being made...sausage and the law" is scarily true.

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