The big tax cut that was to sweep GOP candidates to victory in Election 2000 didn't get much of a response from voters. So, Republicans cribbed a page from President Clinton and broke their tax cut into smaller, easy-to-explain pieces.
But the piecemeal revisions that Republicans will push when Congress reconvenes today could add up to the biggest overhaul of the American tax code in a generation.
GOP activists say these targeted credits could also help Republicans keep control of Congress, especially in the 40 or 50 pivotal races that will decide the outcome.
Instead of plumping again for a broad tax cut, Republicans are recasting this issue as a "repeal of unfair taxes." And Democrats - with "risky scheme" ads lined up to attack a "massive" GOP tax cut in fall campaigns - instead find themselves having to defend a vote not to end unpopular "marriage penalties" and estate taxes.
The GOP's tax-cut strategy includes:
*Repeal of the estate and gifts tax, which has been on the books since World War I.
The House has already approved this, and the Senate starts debating it this week.
*Marriage-penalty tax relief, amounting to some $250 billion over the next 10 years. The penalty, so-called, arises when dual-earning couples pay more in federal income taxes because of their married status than they would if each was filing as a single person. The legislation has cleared the House; the Senate takes it up this week.
*Ending the Social Security earnings tax on seniors. Mr. Clinton signed the legislation in April.
*New education tax credits. These would give tax relief to parents who opt to send their children to private school, under the rationale that these families are paying for - but not using - public schools. The president says he'll veto this measure, which has passed the Senate but not the House.
The American public didn't rally behind last year's GOP push for a big tax cut - which included many of these same elements - because of worry about the federal budget deficit, analysts say. Moreover, most never believed a massive tax cut would actually happen - and if it did, they wondered if the financial health of Social Security would be jeopardized.
Tax cuts on a smaller scale
Still, Americans do "feel they pay too much in taxes and would like relief," says pollster John Zogby. "In smaller bites, especially when the issue of fairness enters, they'll favor it."
Indeed, the targeted tax cuts Republicans now propose are developing broad and somewhat unexpected support.
"What's very important to Republicans is that they not be vulnerable to attacks as a 'do nothing' Congress," says Marshall Wittmann, director of congressional relations for the Washington-based Heritage Foundation. "The marriage-penalty and estate-tax issues both have a lot of traction with the public. Many politicians were not expecting this issue to take off - and it clearly has."
Last month, some 1 in 3 House Democrats crossed over to vote for the GOP repeal of the estate tax, which Republicans successfully recast as the "death" tax. Sponsors of this legislation invoked cases of hardship to minority- and women-owned businesses, downplaying the fact that only 2 percent of estates wind up paying a tax.
"When all is said and done, the government loses billions for something that benefits a handful of wealthy estates," says Mr. Zogby. "But the issue is complicated, and it's harder to defend it in 10 seconds than it is to attack it."
Republicans are also developing campaign materials that will pinpoint exactly how many voters in a district will be helped by a particular tax cut. For example, Republican candidates have access to research that will allow them to pinpoint how many married couples in each congressional district are penalized by the current tax code.
"If a Democratic congressman X votes against the bill, we could say that 60,000 married couples in his district would be penalized because of his 'no' vote," says Marit Babin, spokeswoman for the National Republican Congressional Committee. "Luckily, the vote passed because of Republican votes, but his constituents need to know that their representative did nothing to help."
The Democrats' response
Democrats have their own version of targeted tax cuts. Last week in Nashville, Tenn., Vice President Al Gore campaigned for new targeted tax cuts to help working families pay for health insurance, and lambasted Republican Gov. George W. Bush's tax-relief proposal as a "massive tax cut that primarily benefits the top 10 percent."
"Targeted tax credits was the position of the Democrats. Republicans wanted across-the-board cuts," says Democratic pollster Celinda Lake. "The degree to which the Republicans had to fall back on targeted tax credits shows how discredited their across-the-board cut was."
But, she adds, a lot of Democrats are not willing to take on fights like the estate tax. "It was Republican rhetoric to call it a death tax. They won the framing of the issue."
Many Democrats also favor repealing the marriage penalty. And Ms. Lake predicts they will be able to take just as much credit for ending it as Republicans will.
"Republicans in Congress have learned from Bill Clinton: Instead of trying to pass one big package, they've broken it into discrete pieces. It makes communicating these achievements easier," says GOP pollster Frank Lunz.
As Congress adjourned for the Independence Day holiday, Clinton renewed his offer for a signature on a marriage-penalty tax cut in exchange for Republicans' support for the Democratic version of expanded Medicare funding for prescription drugs.
(c) Copyright 2000. The Christian Science Publishing Society