Centrist Democrats Warn Over Proposed Tax Cuts

by Leroy Baker, Tax-News.com, New York

26 September 2001

A group of centrist Democrats, led by former vice-presidential candidate Joseph Lieberman, have warned the government not to go ahead with a new round of tax cuts with war looming on the horizon.

In its weekly newsletter, released on Monday, the Democratic Leadership Council made its objections clear: 'We know of no historical precedent for a country preparing to wage a major war - an enterprise that inherently requires funding for whatever it takes to win - beginning by cutting taxes,' it said.

The DLC further argued that shoring up domestic security, repairing the damage in New York and Washington, and defeating the terrorist threat to the United States would do more to boost the US economy than more tax cuts, and accused the Republicans of trying to dress up the long sought after cut in capital gains taxes 'in the red-white-and-blue of a wartime emergency measure.'

Several leading economists agree with this perspective, and have warned that a cut in capital gains tax could lead to investors simply unloading more stock at a time when Wall Street is already vulnerable.

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