One way to cut deficit

Published: September 30, 2005

NOT even Armageddon, it seems, could cause President Bush to give up his sacred tax cuts, even with fiscal disaster looming in the form of emergency clean-up costs for hurricanes Katrina and Rita, plus the growing, unbudgeted expenses for the war in Iraq.

Nonetheless, at the risk of thrusting logic in the face of overweening ideology, we call attention to a couple of scheduled tax cuts which if canceled would go a long way toward paying for at least the $200 billion bill expected for Katrina reconstruction.

These cuts, due to take effect Jan. 1, involve repealing current limits on the value of personal exemptions and itemized deductions allowed for taxpayers at the highest income levels.

Don't worry if you've never heard about these cuts. Only the richest 0.2 percent of Americans need be concerned.

The escape clause for Mr. Bush to go along with this plan is that he did not ask for these particular cuts; Congress did, in 2001. The downside is that the tax savings go almost entirely to people making over $1 million a year, which is smack dab in the President's base of support.

According to the Tax Policy Center of the Urban Institute and the Brookings Institution, 97 percent of the tax cuts will go to the 3.7 percent of households with annual income over $200,000. The cuts would average $558 a year for those making $200,000 to $500,000; $4,141 to those in the range of $500,000 to $1 million, and a whopping $19,234 for those over $1 million.

Before howls of protest arise from the upper-bracket folks, consider that their tax bills already average $103,000 less this year because of the Bush tax cuts. The extra revenue from the elimination of these cuts is estimated at about $197 billion over 10 years, or nearly the expected Katrina bill.

Freeing up money to pay for tax cuts, hurricane relief, Iraq, and whatever comes next through the wholesale slashing of domestic programs isn't a realistic option. Americans of good faith looked at the Third World conditions that resulted from lack of public services in New Orleans after Katrina and were appalled. They don't want to live in that kind of country.

Do we really want to put all this on the nation's credit card and expect our children and grandchildren to pay the crushing bill, with interest, through deficit spending?

Forgoing some tax cuts is a better idea. But will the man in the White House show leadership and make it happen?