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Dems, Republican disagree on taxes


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WASHINGTON (CNN) -- Top Democrats, including two possible presidential hopefuls, said Sunday that Bush tax cuts need revamping so that middle-income families are favored, instead of wealthy Americans.

But a key Republican, also a possible presidential contender, argued for more and deeper cuts.

Their remarks came as President Bush prepares to name replacements for two key members of his economic team who stepped down last week as a sluggish economy threatens to erode his support.

Treasury Secretary Paul O'Neill and White House economic adviser Larry Lindsey resigned Friday under pressure from the White House.

Democrats interviewed in Sunday talk shows welcomed the two resignations but said more is needed, including a reduction in the president's $1.3 trillion tax cuts enacted last year.

Some of the strongest comments came from former Vice President Al Gore, the Democratic nominee in 2000.

"Tax cuts aimed at the very wealthiest Americans, designed to take effect several years from now, that's not an economic policy," he said on ABC's "This Week." "That is greed and political payback."

Gore, who said he is weighing a presidential run in 2003, also offered the most specific alternatives: a freeze on future tax cuts that favor the wealthy, and a focus instead on cuts for middle-income families.

Sen. Joseph Lieberman, a ranking Democrat from Connecticut and Gore's running mate in 2000, agreed that Bush's tax cuts are not helping the overall economy.

"More than a million have dropped out of the middle class into poverty. And business investment is the lowest it's been, in the two years of the Bush administration, in 50 years," he told "Fox News Sunday."

"Instead of spending more than half a trillion dollars on the next phase of President Bush's tax cuts, which mostly go to people making over $300,000 a year, we need short-term stimulus for this economy."

Senate Democratic Leader Tom Daschle said Bush's policies had "squandered" $5.5 trillion and raised unemployment.

"Their trickle-down economic theories have been a miserable failure and this is an admission of that miserable failure today," he told CNN's "Late Edition."

"We're going to hit this economy awfully hard in the coming months," Daschle said. "We will be laying out a plan that is immediate, that is targeted directly to the middle class and that doesn't exacerbate the debt."

But Steve Forbes, editor of Forbes magazine and a perennial Republican presidential hopeful, said he thought Americans would respond well to even deeper tax cuts.

"We need a Kennedy-Reaganesque cut," Forbes told "Fox News Sunday."

"That means deepening the personal income-tax cuts, reducing capital gains, getting rid of the alternative minimum tax, and doing something about double taxation of dividends."

The alternative minimum tax is a plan designed to keep wealthy taxpayers from using certain tax benefits to pay little or no taxes. Because of the way it is written, the AMT increasingly affects some middle-income people.

Forbes offered support for supply-side economics:

"I think the American people will respond very positively to a strong muscular agenda. No more baby steps, no more namby-pamby, no more rebates and temporary tax cuts. These tax cuts have to be made permanent and deep."

Forbes also pushed one of his favorite policies: simplifying the U.S. tax code. "Scrap it, start over, have something simple, honest and fair," he said.



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