Clark proposes shifts in tax code
NASHUA -- Calling himself an "old-style Democrat," retired Army General Wesley K. Clark announced a tax plan yesterday that would eliminate federal income taxes for families of four making up to $50,000, and pay for it in part by raising income taxes for those earning more than $1 million per year.
Clark's plan would consolidate several existing tax breaks for families with children, and replace them with a standard $2,250-per-child tax break, available for children up to 17. It would provide tax cuts for families making up to $100,000, he said.
Currently, married couples earning up to $39,000 who have children pay no income taxes.
The plan would also reduce the marriage penalty for low-income couples and raise the earned income tax credits. And, Clark said, it would eliminate income tax filing for many Americans who would instead fill out a short questionnaire and leave the government to calculate taxes for them.
To pay for the proposal, Clark would create a new, higher tax bracket for those earning more than $1 million. Currently, Clark's aides said, the nation's top marginal tax rate is 35 percent. Clark would repeal President Bush's tax cuts for Americans earning more than $200,000, increasing the highest tax rate to 39.6 percent. He would also add a new tax bracket of 44.6 percent, which he said would apply to the top 0.1 percent of taxpayers.
Clark said he would also pay for the plan by closing corporate loopholes, such as tax breaks for companies that shift headquarters overseas.
"If that makes me an `old style' Democrat, well, then I accept that label with pride and I dare you to come after me for it," Clark said in a speech in Nashua yesterday.
Economic specialists say Clark's plan jibes with many Democrats' ideas about making the tax code more progressive, though it is not as radical as some other candidates' proposals. Representative Richard A. Gephardt, for example, has suggested giving tax breaks to companies that provide more health care benefits for their workers, said Mark Zandi, chief economist at the Pennsylvania-based consulting firm economy.com.
Clark's plan is "not a radical departure from the tax code," Zandi said. "It takes various parts of the tax code and works with them and tries to come up with a more comprehensive and better approach to raising tax revenue."
Clark's plan is also significant for defining "middle class" as families earning up to $100,000, a higher income rate than some have given, said Ross Gittell, a business professor at the University of New Hampshire.
"It's very clear what his priorities are, based on the documentation," Gittell said.
And Clark cast his proposal yesterday in some of the class-warfare terms that have characterized the Democrat-Republican divide on tax issues. "We've had a shift in this country where working families are not getting the rewards of their hard efforts," he said.
Clark labeled his plan "Families First," a name that echoes Bill Clinton's 1992 "Putting People First" economic plan. He said, at one point, "If Karl Rove is watching today, I want him to hear me loud and clear."
Bush has said his tax cuts were intended to provide a stimulus for economic growth; economists have disagreed about whether the cuts are responsible for improving economic trends.
Most of Clark's proposals would require legislation, much of which might prove difficult in a Republican-controlled Congress. But Clark said yesterday that he believed he would have congressional support.
"I'm not giving up on having a Democratic Congress if I'm the candidate," he said.
Though Clark deflected questions comparing his ides to those of former Vermont governor Howard Dean, Clark's aides pointed to a difference between his tax plan and Dean's proposal to eliminate all of Bush's tax cuts. Clark proposes to repeal only the Bush tax cuts for those making more than $200,000.
