Probably Little Good Can Come of This : Quadrennial Washington tax-cut scramble is more politics than economics

Election years notoriously spur heated partisan competition over which party can claim to be doing more for the most voters. When an election year happens to fall in a period of recession the competition can get especially feverish, as well sometimes as foolish.

The big partisan contest so far this year has been over taxes. That has seen most congressional Democrats lining up behind a package they advertise as a boon to the great middle class, but only after they first voted down a White House-backed “growth program,” some of whose provisions were not all that dissimilar from what the Democrats offer.

Ultimately, the argument over fiddling with the tax code may simply end in a legislative deadlock, with each side having won fresh opportunity to blame the other for inexcusable inaction. Alternatively, a nervous bipartisan perception that something has to be done before the November elections could produce a compromise that would let each side claim credit for overcoming a recession that, one hopes, may be in its terminal stage anyway. For now, though, it’s virtually certain that the bill the House passed last week on a mostly party-line 221-210 vote will be vetoed by President Bush if it clears the Senate in anything like its current form. Bush chiefly objects to its proposed boost in taxes on the wealthy, including a 10% surcharge on incomes over $1 million.

The interesting thing is that all this squabbling over who can best revise tax laws has left most of the public remarkably unimpressed and uninvolved. Most middle-class voters, so the polls suggest, are less than passionate over the prospect of the $400 maximum tax credit for couples that the Democrats are offering. That, supposedly, is the legislation’s key political appeal. Here, surely, is a case where the public’s good judgment may well outshine that of its representatives.

To note the underlying partisanship of the tax debate is not to suggest that the economy and taxpayers couldn’t benefit from certain tax code revisions. Some changes have been proposed that merit the kind of close and fair scrutiny that election-year advantage-seeking doesn’t always encourage. The $5,000 tax credit against the purchase of a first home is one such idea. New looks also ought to be taken at the capital gains tax, and at making tax rates more progressive. The aim shouldn’t be to cater to this “class”--for which read voting bloc --or to stick it to that, but to do what would be most beneficial for consumers, business and the nation’s economic health. The relative calm of a non-election year is the preferred time for action.