U.S. Treasury Secretary Blames Democrats for Tax Debate

U.S. Treasury Secretary Blames Democrats for Tax Debate

NewsMax.com Wires
Friday, Feb. 9, 2001

WASHINGTON – U.S. Treasury Secretary Paul O'Neill said Friday that congressional Democratic leaders who criticize President George W. Bush's tax cut plan are oversimplifying their arguments and do not understand how the economy works.

O'Neill, appearing on CNN, ABC and CBS on Friday morning, said that arguments presented Thursday by the leaders of the House and Senate Democratic minorities that the rich would be able to afford new luxury cars with their tax savings were "lunacy."

"Higher-income people are going to invest their money in the economy," O'Neill said on CNN. "They aren't going to buy another car."

O'Neill also agreed with the assessment of Federal Reserve Chairman Alan Greenspan that the economy has slowed to the point of virtually no growth, and insisted that the tax cut will help revitalize growth.

Senate Minority Leader Tom Daschle of South Dakota and House Minority Leader Richard Gephardt of Missouri argued that Bush's plan would give a person with a $1 million income a $46,000 tax cut, more than enough to buy a new luxury car, while a typical wage-earner would get about $227, just enough to buy a muffler for a used car.

Bush's 10-year, $1.6 trillion tax-cut plan, which was sent to Congress on Thursday, includes a reduction of tax rates and a simpler structure of tax brackets, a doubling of the child tax credit to $1,000 a child, a cut of the marriage penalty that affects two-earner couples, and elimination of the estate tax.

Democrats, while supporting a tax cut closer to $800 billion to $900 billion, contend that Bush's plan would reward the rich and bring back the budget deficits that finally were extinguished under former president Bill Clinton.

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