June 25, 1997

This Scheme is Not Credible, and Should Not Be Taken Seriously

In contrast to the bipartisan Senate tax relief bill that passed the Senate Finance Committee with the support of all the Committee's Democrats, the Senate Minority Leader has produced a purely political bill. Clearly, it's not a serious plan since he punishes the very taxpayers -- families with children, college students, seniors, small business owners, farmers and ranchers -- he claims he wants to help. Additionally, it can't be taken seriously because it withholds until the next century most of the benefits it claims to provide -- and it breaks the budget agreement by providing only $68.5 billion in net tax cuts.

Daschle Scheme Punishes Children

• Daschle's scheme guts the child credit by providing $14 billion less to children than provided by the bipartisan plan.
• Daschle's scheme punishes teenagers: his tax credit applies only to children under age 13 (only in the next century would he cover teenagers). The bipartisan plan covers kids through age 16 -- that's millions more children who get the credit, and get it now.

• Daschle's scheme makes your family's decisions for you: he provides only a fraction of the tax credits that the bipartisan plan gives to America's working families.

-- It reduces the child tax credit to $350, and provides a "bonus" only to families who can afford to set up an education savings account -- and this "fine-print" mandate applies even to families with infant children.

--Senator Daschle claims his plan is better for working families, but it would require the "working poor" and EIC recipients to save for education rather than use the money for more immediate needs for their children.

• Taxpayers don't get the full $500:

- until the next century

and

- even then, only if you can afford not to spend the money on your children for 18 years.

--If your kids have needs today and you can't afford to set up an education IRA now, Senator Daschle's scheme punishes you by reducing your credit to $350 -- in the year 2000 (and only $250 through 1999).

--If you are well off and can afford to establish an education IRA today for your children, Senator Daschle eventually will reward you with a full $500 tax credit -- in the next century!

-- Families making as little as $70,000 wouldn't even get this much help because the Daschle credit phases out for families with incomes beginning at $70,000.

Daschle Scheme Punishes College Students -- and Breaks the Budget Deal

• President Clinton's plan and the GOP plan both provide students $1,500 in HOPE education tax credits immediately -- while the Daschle plan would only give a partial HOPE credit -- $1,100 from 1997-1999, and $1,200 in 2000.
• The Daschle plan is a deal-breaker: Senator Daschle claims his education package will cost $41 billion -- that's $6 billion more than the President and Congress agreed to in the budget agreement!

Daschle Scheme Punishes Seniors and Small Business Owners

• Nearly a third of the capital gains realized in this country last year were realized by seniors. So, when Daschle reduces the capital gains tax benefit, he's punishing seniors.
• Seniors, small business owners, and the self-employed all would pay 10 percent more in capital gains taxes under Daschle's scheme than under the bipartisan Senate proposal.
• The Daschle scheme also punishes the lowest income workers -- his plan would reduce their capital gains tax rate less than under the bipartisan plan for even those in the lowest (15-percent) tax bracket.
• Daschle's proposal punishes seniors and families trying to save for retirement by removing the bipartisan Senate plan's retirement savings incentives. Even the President

included bipartisan retirement savings in his proposal. Our plan rewards middle-aged Americans and homemakers with greatly expanded IRA opportunities.

• The Daschle scheme punishes seniors, small business owners, and farmers and ranchers by providing less than half the estate tax relief contained in the bipartisan Senate plan -- $3 billion versus $6.5 billion.

Daschle Scheme Withholds Most of its Tax Relief Until the Next Century

• Daschle's proposal is truly a plan for the 21st Century -- because that's when the real benefits kick in -- after President Clinton leaves office.
• Senator Daschle breaks the budget agreement between the President and Congress by providing 20-percent less in tax relief -- his scheme provides just $68.5 billion in net tax cuts.

-- The Daschle plan also makes no mention of the additional $8 billion in child health provided for in the bipartisan Senate plan.

-- The bipartisan bill provides $84.8 billion in total benefits ($76.8 billion in tax relief and $8 billion for childrens' health).

• At the same time Senator Daschle and his cohorts charge the Finance Committee's Republicans and Democrats with ballooning the deficit in the years to come with the bipartisan tax relief plan, their own plan doesn't even take full effect until the out-years. Maybe Daschle should take a look at his own scheme's effect on the long-term deficit -- if in fact it were a serious plan.