May 23,2003

Baucus Expresses Concern Over Rush to Pass Tax Bill

Senator Criticizes ''Yo-Yo'' Tax Provisions

(WASHINGTON, D.C.) As the Senate moved today to pass the tax package by narrow margins,U.S. Senator Max Baucus expressed his grave concerns that the bill won't provide significanteconomic stimulus and will further burden our country's working families and small businessesthrough provisions that are "here today, gone tomorrow."

The $350 billion tax package passed by the Senate involves reducing the rates at which taxesare paid on dividends and accelerating cuts to individual tax rates. Baucus said that a majority ofthis tax relief will be felt by corporations and higher income individuals who are less likely toreinvest in the economy.

Baucus especially expressed concern over the plan to sunset certain provisions after just afew years, such as the marriage tax penalty and child tax credit.

"Increasing the child tax credit and eliminating the marriage tax penalty will provide taxrelief to our nation's families -- and these are the provisions that the bill will sunset after only a fewyears," Baucus said. "Phase- ins and sunsets are used to shoehorn large tax cuts into a small budgetwindow. This tax cut is one big yo-yo. Now you see it. Now you don’t."

Baucus is also concerned with the way the tax bill was crafted, saying that by workingtogether, the Congress could have developed a bill that would have provided genuine economicstimulus and gained widespread support.

"A small group of Members crafted the final version of the bill while the majority of us wereleft out of the discussion. This resulted in an ineffective, irresponsible package that was condemnedby half of the Senate. That's not the way to do business," Baucus added.

Earlier this year, Baucus worked closely with Chairman Chuck Grassley (R-Iowa), Sens.George Voinovich (R-Ohio), and Olympia Snowe (R-Maine) to ensure that the final tax bill wouldnot exceed $350 billion.

"I would like to thank Chairman Chuck Grassley and Senators George Voinovich andOlympia Snowe for their commitment to holding the tax bill to $350 billion," Baucus said. "While Ican't support the final bill, I commend my three colleagues for keeping their word despite difficultcircumstances.

"Unfortunately, it is only through gimmicks and games that the tax bill is held to $350billion. This bill will lead to higher deficits and more uncertainty for our country. It's adisappointment that a better outcome wasn't achieved for our economy and our nation."###