As the presidential race reaches its final weeks and the
mud-slinging intensifies, it has becomes hard to distinguish
between the economic policy that each candidate holds and the
policy that his opponent says he supports.
Contradictions between President Bush and Sen. John
Kerry’s policies are certainly highlighted by the most vocal
student politicians at UCLA, members of the Bruin Democrats and
Bruin Republicans.
President Bush, who has passed three major tax cuts in the past
four years, plans on making these cuts permanent. The cuts include
a reduction of the marriage penalty and phasing out the death tax,
according to Bush’s campaign Web site.
Matthew Knee, acting executive director of Bruin Republicans,
believes that these tax cuts were key factors in bringing the
economy out of a recession. “Bush’s tax cuts are
intended to encourage all businesses to grow. He arrested the
market slide by cutting the dividend and capital gains
tax.”
Kerry has called these cuts into question, claiming that Bush
has made cutting taxes for the wealthy a priority over creating
jobs. For his part, Kerry calls for a different kind of tax cut,
according to the Kerry campaign Web site.
Kerry plans to cut taxes for the middle class, shifting the
burden to the top 2 percent of the country. He also wants tax
breaks that encourage child care, health care and education.
Perhaps most pertinent to students at UCLA would be his proposal
for a tax credit on up to $4,000 for college tuition.
Professor Michael Darby of the UCLA Anderson School of
Management questions Kerry’s ability to fund many of the
proposals by simply taxing our country’s richest.
Darby points out that the top 2 percent already pay a large
portion of the country’s taxes, and does not believe that
Kerry’s proposal is feasible. In fact, he believes that it
will only encourage that sector to “avoid taxable
activity.”
Doug Ludlow, president emeritus of the Bruin Democrats,
disagrees.
“Kerry’s aiming at giving cuts to the people with
the greater marginal propensity to spend, so that it spurs the
economy,” Ludlow said. Cutting taxes for the middle class
stimulates economic growth for the entire economic spectrum,
including the top 2 percent, Ludlow added.
Among Kerry’s related proposals is the New Job Tax Credit,
through which Kerry hopes to create jobs as part of his plan to
battle outsourcing. The credit would pay companies a portion of
their payroll taxes for each new job created, according to the
Kerry Web site.
“No president can completely stop outsourcing, but Bush
doesn’t even have a plan,” said Ludlow.
But Darby believes that taxing income while subsidizing wages is
an ineffective policy because it simply takes from one hand while
giving with another.
Bush and Kerry’s plans do have some things in common.
Regardless of the policy, both candidates will have to face
Congress in their attempts to pass their tax plans.
In addition, both Bush and Kerry will have to struggle to
implement any sort of comprehensive plan to deal with the mounting
deficit. Ludlow said Kerry is “committed to cutting the
deficit”, while calling Bush’s spending
“astronomical for a party who claims to be fiscally
conservative.”
Knee believes that Bush will slowly cut down the spending and
“over-management” of government programs, and laid the
blame for the deficit on an inherited recession and outside factors
such as the attacks of Sept. 11, 2001 and the wars in Iraq and
Afghanistan.
Experts believe that the tax policies of Kerry and Bush are
disparate enough that they will certainly play a decisive role in
such a close election.