House Ways and Means Chair Thomas: Still No More Taxes!

William Thomas (R-CA), head of the House Ways and Means Committee, has rejected the use of offsetting revenue-raisers to keep the reconciliation tax bill within the original $70 billion guideline. Instead, he, like Senator Grassley (R-IA) is suggesting taking popular tax break extenders, such as a provision to extend the tax incentive for K-12 teachers purchasing school supplies, outside the reconciliation process. Part of the problem is that the Senate has approved a one-year AMT patch to keep middle-class taxpayers out of AMT while the House has approved a two-year extension on reduced capital gain and dividend rates.

I am favorable toward the AMT patch (and in fact would have gone for a longer and more thorough tax extension), favorable toward the tax extenders, lukewarm on the capital gain and dividend (especially capital gain) extension, and not particularly eager for offsets, which probably will add complexity as well as tax revenue. I do not feel committed to $70 billion either; after all, it ultimately SHOULD be the taxpayers' money unless Washington can make a good case for keeping it.