Tax Cuts

TRENTON — When the electric company shut off Barbara Offredo's service last spring, she used flashlights to cheer up her 11-year-old son, Joseph, who missed lights, cooked meals, and hot showers. "Pretend we are camping," she told him, knowing it would be eight days before she could pay some of what she owed. Offredo, 51, of Hamilton, choked up telling the story Monday. A full-time hospice nurse and single mother of two, Offredo said she is on the brink of homelessness because rent for her two-bedroom apartment eats up half of her monthly salary.

ON THE ISSUE of President Bush's motives for creating the Iraq war, I'm puzzled why no one in "government" has looked at this mammoth issue through the lens of the simultaneous tax cuts for the rich. If a war is truly just, then all are asked to sacrifice. The tax cuts and continuing efforts to make them "permanent" are proof that this whole production is a sham. Mitch Deighan Philadelphia

IN HIS letter "The snake oil of tax cuts" (Nov. 29), municipal union chief Tom Cronin offers a skewed view of our city's fiscal condition, blaming pending layoffs on Philadelphia's desperately needed tax-reduction program. But spending for the city administration's pet projects - not tax cuts - is forcing the current municipal belt tightening. In recent years, the city exhausted a $300 million surplus with hundreds of millions of dollars of new spending for the Eagles stadium and Phillies ballpark, for blight removal programs, for police overtime, for the school takeover deal and for the increased costs of raises for the city's union workforce.

After decades of jacking up taxes in Philadelphia, this is no time to undo the important steps taken by former Mayors Edward G. Rendell and John F. Street in chipping away at the onerous wage and business taxes. But now that the economy is faltering, there is some talk at City Hall of halting the tax cuts. That's the worst message Mayor Nutter and City Council could send to workers, businesses and residents. Ending the meager wage- and business-tax cuts already on the books - as well as failing to push ahead with the business cuts proposed by the mayor - would signal that the city is headed in the wrong direction.

Please explain a rather mysterious idea in your editorial "Bush's good week" (March 1) that "Clinton's careful budgets. . .reduced the federal deficit created by Reagan's tax cuts. " The budget deficits of the Reagan years were not caused by tax cuts. As tax revenues went up - not down - after Reagan's tax cuts, the cuts couldn't have caused the deficits, could they? CAMERON KELLEY, Philadelphia SAT and minorities Daniel Saras (letter, Feb. 28) says the SATs should deny minorities spots that can go to more deserving students.

The White House, showing signs of indecision over how to stimulate the economy, backed away yesterday from recommending new tax cuts and raised the possibility that it may not propose an economic recovery plan. White House spokesman Marlin Fitzwater indicated that President Bush wanted to assess new economic data before deciding on a course of action, despite increasing calls on Capitol Hill from Republicans and Democrats for immediate steps to jump-start the nation's economy. The caution contrasts with White House statements earlier in the week suggesting that an economic recovery plan could be unveiled by week's end. The mixed signals reflect disagreement within the administration over economic policy, with some officials pushing for tax cuts and others contending that the economy is recovering from the recession on its own. Yesterday, Vice President Quayle predicted that economic statistics due out next week would show the economy getting better, and he urged Americans to go out and buy new automobiles and other goods.

Maybe it was a Freudian slip. Or maybe it was one of those few times when a politician says what he really thinks. Rep. Bill Richardson (D., N.M.), explaining his party's middle-class tax cut plan to the news media recently, lapsed into plain English: It's "a political document," he said. "Long-term economic policy is needed in this country," Richardson said. "But the fact that we have an election supersedes that. " It may be crass politics and bad economic policy.

In the United States, if you're wealthy or a land-rich farmer and you want your heirs to avoid paying taxes on your estate, plan to die in 2010 - not before, and certainly not after. That's the only year when you can avoid estate taxes entirely, according to the 2001 tax-cut law in a provision once derided by Sen. Rick Santorum (R., Pa.) as "pro-suicide. " It is a bit of legislative gimmickry designed to squeeze a big tax cut into a small budget box. Now, as Congress fashions a new 10-year tax-reduction plan, it's using the same kind of legerdemain.

There was something about the Senate's debate on cutting taxes this week that was far more palatable than what transpired in the House a week earlier. In the Senate, amid long hours of highly political rhetoric, there were moments of bipartisanship. And there were signs, albeit faint, that political posturing might give way to agreement before year's end. The difference between the House and Senate was embodied in the labels attached to their respective plans of how to cut taxes by $792 billion over the next 10 years.

TRENTON — The Christie administration backtracked Wednesday on its plan to borrow less in 2013 to pay for transportation infrastructure improvements. It hopes to shift $260 million originally intended for transportation spending into the state's general fund, which would help facilitate Gov. Christie's top priority in the coming fiscal year: implementing a 10 percent income-tax cut. The state would then borrow $260 million to replace that cash in the annual $1.6 billion transportation capital fund, a practice Christie previously criticized, State Treasurer Andrew P. Sidamon-Eristoff said Wednesday.

TRENTON — When the electric company shut off Barbara Offredo's service last spring, she used flashlights to cheer up her 11-year-old son, Joseph, who missed lights, cooked meals, and hot showers. "Pretend we are camping," she told him, knowing it would be eight days before she could pay some of what she owed. Offredo, 51, of Hamilton, choked up telling the story Monday. A full-time hospice nurse and single mother of two, Offredo said she is on the brink of homelessness because rent for her two-bedroom apartment eats up half of her monthly salary.

COULD commercial and industrial property owners get an unintended tax break under Mayor Nutter's plan to move to a property-tax system based on market values? That's a question City Councilman Bill Green raised Monday during a Council hearing in which he said that an analysis by his office found that commercial and industrial property owners could see a huge decrease in their tax bills this fall under Nutter's proposal. "Commercial and industrial property owners will get a huge, as far as I know, unintended decrease in taxes at the expense of residential property owners," Green said.

WASHINGTON - President Obama said Saturday his goal of defeating al-Qaeda was within reach and that it was time to turn the country's attention to domestic concerns. Just four days after his trip to Afghanistan, Obama said money saved from ending the wars in Iraq and Afghanistan should help pay down the national debt and go to health care, education, and infrastructure. "After more than a decade of war, it is time to focus on nation-building here at home," he said in his weekly radio and Internet address.

  One of Gov. Christie's most colorful quotes last week had nothing to with the presidential race, Bruce Springsteen, or the fat jokes hurled at him at last weekend's White House Correspondents' Dinner in Washington. When Christie said Monday that he would rather "rearrange my sock drawer tonight" than debate Assembly Majority Leader Lou Greenwald (D., Camden), he was talking taxes, specifically their differing plans to cut them. Economics and tax experts interviewed for this story differed on the merits of the three tax-cut plans under review in Trenton.

COLUMBUS, Ohio - Plunging into his campaign for a new term, President Obama tore into Mitt Romney on Saturday as a willing and eager "rubber stamp" for conservative Republicans in Congress and an agenda to cut taxes for the rich, reduce spending on education and Medicare, and enhance power that big banks and insurers hold over consumers. Romney and his "friends in Congress think the same bad ideas will lead to a different result, or they're just hoping you won't remember what happened the last time you tried it their way," the president told an audience estimated at more than 10,000 partisans at what aides insisted was his first full-fledged political rally of the election year.

For too long, big companies have benefited from Pennsylvania lawmakers' refusal to close tax loopholes. They have been free to use aggressive avoidance schemes to shield their income from state taxes and shift the cost of public services to families and other businesses. After close to a billion dollars in cuts to public schools and social services, state lawmakers from both parties are taking another look at this issue. This bipartisan recognition of the problem is welcome. Unfortunately, one proposed cure may be worse than the disease.

EXETER, N.H. - Eyeing the November election, Vice President Biden on Thursday called presumptive GOP presidential nominee Mitt Romney "out of touch" and "out of step" with history and basic American values. Biden also opened a new line of attack, introducing the "Romney rule" and contrasting it with President Obama's push for the "Buffet rule" to force rich people to pay more of their income in taxes. The measure, named after billionaire investor Warren Buffett, says the wealthy should not pay taxes at a lower rate than middle-class wage-earners.

Gov. Christie's treasurer last year chided the nonpartisan Office of Legislative Services for overly optimistic tax estimates. On Tuesday, the OLS gets to return the favor. When the Senate Budget Committee convenes Tuesday, Republican Treasurer Andrew Sidamon-Eristoff, who has been consistently conservative in his revenue estimates for the first two years of the Christie administration, will have to explain why he is projecting the equivalent of an 8.7 percent increase in revenue in the fiscal year that begins June 30 - a robust $2.2 billion New Jersey Comeback that is not only the most optimistic revenue projection in the country, but also twice as large as most other states are expecting.

WASHINGTON - A new estimate from congressional economists says the government will run a $1.2 trillion deficit for the budget year that ends a few weeks before Election Day. It would be the fourth straight year of trillion-dollar-plus deficits. The almost $100 billion spike from earlier projections for the fiscal 2012 deficit comes almost exclusively because Congress passed legislation recommended by President Obama to renew a 2 percentage point cut in payroll taxes and jobless benefits for people unemployed for more than six months.