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Final tax legislation uses proposed rural schools funding
to provide more tax cuts to the wealthy
Wyden, Baucus identified a full-funding
source for county payments,
but today’s tax bill instead uses it to offset more capital
gains tax cuts
May
11 , 2006
Washington, DC – A major tax
bill expected to be approved by Congress this week uses a funding
provision — proposed by U.S. Senators Ron Wyden and Max
Baucus (D-Mont.) as a full-funding source for the rural county
payments bill — to instead provide tax cuts for the wealthy.
To date, the Senators’ proposal has been the only full-funding
proposal for county payments on Capitol Hill. Wyden will vote
against the tax bill in the Senate, citing the use of the county
payments funding provision as well as other troubling aspects
of the bill.
“I can't support raiding a
scarce funding source to benefit the fortunate few when rural
counties across Oregon need this money to keep their heads above
water,” Wyden said. “I thought it was a logical idea
to use money from tax dodgers to keep the Federal government from
dodging its commitments to our nation’s school kids. But
once again, Congress is proving to be a logic-free zone.”
In March, Wyden cosponsored legislation
that would fully fund a reauthorization of the county payments
law, without a new tax or raising existing taxes, by ensuring
that a portion of Federal taxes are withheld from payments by
the Federal government to government contractors. The Federal
government currently does not withhold taxes when it pays government
contractors and a recent study by the Government Accountability
Office shows that a surprisingly large number of those contractors
never pay their federal taxes.
“Apparently, the Congressional
leadership agrees we had a good funding idea,” Wyden said.
“They liked it so much they used it for their own priorities.”
In early 2005, Wyden and others
introduced a bipartisan bill to reauthorize for another seven
years the county payments law that provides a stable revenue source
for education, roads and other county services in rural areas
(the original law is due to expire at the end of this year). In
February 2006, the Administration proposed reauthorizing the law
for only five years while cutting funding by 60 percent and funding
that reduced portion with a controversial Federal land sale scheme.
Stung by bipartisan criticism of
its land sale proposal, the Administration challenged supporters
of the law to identify a different funding source, a challenge
Wyden and Baucus met with their full-funding proposal. Instead
of acting on their proposal, the tax bill conferees chose to use
the funding proposal to offset an extension of capital gains and
dividend tax cuts that do not expire until 2008.
Today’s tax bill, HR 4297,
passed the U.S. House of Representatives last night; following
Senate passage it will be sent to the President for his signature.
Due to Senate procedural rules, Wyden could only vote ‘yea’
or ‘nay,’ and was not allowed to offer an amendment
to redirect funding to the county payments law.
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