Waiting for a war tax

WASHINGTON - If there’s an air of unreality about the debate in Congress over the cost of the Iraq war, there are two reasons for that.

First, since President Bush will not sign a tax increase into law, members of Congress in both parties must wait for the next president to propose tax increases in 2009 to help pay for the war.

Second, the current income tax rates don’t expire until 2011, thus no retooling of those rates is going to be enacted much sooner than that.

Bush on Tuesday vetoed the $150.7 billion Labor-HHS-Education spending bill, because it would have spent $10 billion more than what he’d proposed.

Borrowing from China, Saudi Arabia
At their Tuesday “war costs” event, Democratic leaders also lamented the costs to the taxpayers of borrowing hundreds of billions of dollars to pay for operations in Iraq and Afghanistan.

“We are borrowing money from Saudi Arabia, China, Japan, Mexico,” said Senate Majority Leader Harry Reid.

Schumer emphatically did not want to discuss tax increases. Asked whether it would make more economic sense to raise taxes to pay for Iraq and Afghanistan operations rather than to borrow money, Schumer quickly said, “Well, I don’t know about tax increases.”

Some less senior Democratic senators were willing to talk Tuesday about tax hikes.

Sen. Amy Klobuchar, D-Minn., said, “I think we have some messed-up priorities and I think we need to change the way we’re entering into tax reform. I think the answer is to roll back the Bush tax cuts on the wealthiest, the people making over $200,000 a year.”

She said she also favored closing some tax loopholes, including benefits for oil companies.