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Dean camp mulls new tax proposal

Howard Dean’s advisers said Wednesday they are considering a new proposal to reduce the tax burden on the middle class, but that the details probably won’t be announced until after voting in Iowa and New Hampshire.
/ Source: The Associated Press

Howard Dean’s advisers said Wednesday they are considering a new proposal to reduce the tax burden on the middle class, but that the details probably won’t be announced until after voting in Iowa and New Hampshire.

Several of Dean’s rivals made taxes the centerpiece of their challenge to the Democratic presidential front-runner in two debates this week in Iowa, arguing that his proposed repeal of all of President Bush’s tax cuts would hurt the middle class.

Dean wants to repeal Bush’s 2001 and 2003 tax cuts to help balance the budget, pay for spending programs such as health care and education, and make the tax system fairer. Dean spokesman Doug Thornell said the campaign is discussing a new proposal to do that.

Dean would not comment on his plans, other than to release a statement reiterating his support for a fairer tax code.

“As I have consistently said since November 2002, I will propose additional tax reforms that will make the tax code fairer for working families and that will ensure that corporations and the wealthy pay their fair share,” he said.

No details from campaign
The campaign would not provide details, including when the plan will be made public. Gina Glantz, a senior adviser traveling with Dean, suggested it would be released after Bush sends his fiscal 2005 budget to Congress on Feb. 2 — after voters in Iowa and New Hampshire choose a Democratic candidate.

Dean in the past has talked about reducing income tax paperwork and closing corporate tax loopholes. Thornell said Dean has never ruled out a middle class tax cut of his own.

Dean adviser Steve McMahon said, “No decisions have been made about additional reforms except one, they would not involve keeping the Bush tax cuts.”

Dean argues that Bush’s tax cuts have not helped the middle class because they have been offset by service cuts and higher property taxes. His stance is a point of contention with rivals such as Massachusetts Sen. John Kerry, Wesley Clark, North Carolina Sen. John Edwards and Connecticut Sen. Joe Lieberman, who argue that only Bush’s tax cuts targeted to the wealthy should be repealed.

Clark spokesman Matt Bennett questioned Dean’s timing. On Monday, Clark announced a plan to eliminate taxes for families of four earning less than $50,000 a year.

“Howard Dean seems to have a secret plan for middle class tax cuts that was hatched immediately after Wes Clark announced his real plan for sweeping tax reform and relief for working families,” Bennett said.

Edwards also critical
Edwards also criticized Dean’s shift.

“The American people won’t have to guess what I’ll do as president,” Edwards said. “They know, and I haven’t changed my mind.”

Meanwhile, a Kerry television ad to begin airing Thursday in Iowa takes on Dean and Missouri Rep. Dick Gephardt for wanting to erase all of Bush’s tax cuts. It features Elizabeth Hendrix, a single mother of four from Des Moines who makes $28,000 a year. Kerry says she would lose $1,800 if all the Bush tax cuts are eliminated.

The ad doesn’t name Dean or Gephardt, but Kerry’s campaign said it is meant to highlight their positions. Dean and Gephardt are Kerry’s chief rivals in Iowa, where Democratic strategists and pollsters say the race is tightening less than two weeks before the Jan. 19 caucuses.

“I don’t think we should be asking the middle class to be the people who are going to pick up for George Bush’s mistakes,” Kerry says in the ad.

Dean's switch
Earlier last year, Dean talked about repealing at least parts of Bush’s tax cuts but considered leaving parts such as the child tax credit, marriage penalty relief and perhaps some breaks for people who inherit limited estates. But when Bush signed his second major tax cut bill last May, Dean said he would raise taxes back to the levels under President Clinton and put the nation’s fiscal house in order.

“You cannot promise people tax cuts, college education, health care and whatever else you want, and say, ‘Oh, it’ll all be fine,”’ Dean said Tuesday during a debate on National Public Radio. “That’s what George Bush is doing.”

The Boston Globe reported Wednesday that Dean’s decision comes after his economic advisers, concerned that his position could be politically fatal in the general election, unanimously recommended that he back middle class tax cuts to offset the repeal of Bush’s.