Feb. 28, 2001
Dear President Bush,
On behalf of Eagle Forum members nationwide, we thank you for your
commitment to provide tax relief for all taxpayers. Recognizing
that the American people are paying more taxes today than ever before
in our nation's history, we agree with you that the surplus should be
returned to the taxpayers.
The proposal to provide relief from the "marriage tax" penalty should
be changed to ensure that one-earner families receive the same benefit
as two-earner families. It is unacceptable that a two-earner family
would have a lower federal income tax bill than a one-earner family
with the same joint income.
In order to offset the revenue loss of expanded marriage tax penalty
relief, we support eliminating the Child & Dependent Care Tax Credit
(DCTC), which is currently available only to two-earner couples. If
not eliminated, the DCTC should be capped at the same income level as
the Child Tax Credit (currently $100,000, which the you propose to
raise to $200,000). (Currently, the DCTC is virtually the only income
tax deduction or credit that's not capped.)
We support your plan to eliminate the death tax while preserving the
fresh start (step-up in basis) for inherited property, which has existed
since the first federal income tax in 1913. We oppose Congressional
efforts to impose a new tax on inherited property called "carryover
basis." Carryover basis is not an acceptable trade-off for elimination
of the death tax; it is simply a new death tax in a different form.
If Congress will not agree to completely repeal the death tax without
passing a new "carryover basis" tax, then we support an alternative plan
to provide substantial estate tax relief by a combination of (1) raising
the Unified Credit Exemption Equivalent (currently $675,000) to $5,000,000
this year, and (2) reducing the tax rates (currently as much as 55%) down
to the rate applicable to capital gains (currently 20%).