This editorial appeared in today's Los Angeles Times:
Like most of us, Congress is waiting till the last minute to decide what to give this holiday season. Oh, lawmakers know they want to drop an economic stimulus package down the nation's chimney, but they just can't agree on the specific gifts their bounteous bundle will contain. At risk of deflating the joy of giving that is sweeping Washington, here's a Grinch's list of presents we hope Santa will dump with extreme prejudice from the stimulus sleigh.
Retroactive corporate tax cuts. House GOP leaders such as Dick Armey seem giddy thinking about the pleasure that corporations would have upon receiving a refund of what they paid under the "alternative minimum tax" over the last 15 years yes, Virginia, that's 15 years. Ronald Reagan reluctantly agreed to that tax, a piece of the 1986 tax reform package, which ended companies' ability to dodge taxes entirely through write-offs. The proposal would hand out millions to corporations such as General Motors and Ford for doing nothing. Even Enron, which recently went broke after deceiving investors and workers, could conceivably get this windfall.
Whopping corporate tax deductions. The Democrats, not wanting to seem ungenerous, have met the GOP demand for repeal of the alternative minimum tax by suggesting that companies be allowed to take more deductions. This would amount to gutting the alternative minimum tax in all but name returning things to the pre-1986 good old days. Dozens of states would be hard hit by any changes in calculations of deductions for capital investments because they follow federal tax law.
An accelerated drop in income tax rates. Some Republicans hope to make the season bright by cutting the 27 percent rate to 25 percent in 2002. But this gift would benefit the top one-fourth of taxpayers and cost $54 billion in lost revenues over 10 years. Where's the stimulus in giving a break to upper-income folks who are unlikely to use it to buy extra groceries?
A 30 percent, three-year tax write-off on new equipment. The Bush administration wants to include this, although multiyear tax cuts have little immediate stimulus effect.
A Trojan-horse, two-year voucher-credit health care plan. The White House is offering a scheme that would give displaced workers a temporary tax credit for health care. But what Rep. William M. Thomas, a California Republican, and other congressional Republicans really want is to use the voucher idea as a wedge in replacing current employer-paid health care with a free market approach similar to the use of vouchers for education. Lawmakers are scrambling, fighting, compromising, eager to return home for the holidays with something to show for all their time in the stimulus workshop. The economy could certainly use a boost. But a bad bill is not better than no bill.
We're glad Congress is playing Santa, but if it really wants to bring joy to the economy, someone has to learn to say, "No no no!"