Taxes and why everybody loves Hank.
Few Washington observers believe the President will relinquish his promise not to raise taxes, and tax hikes clearly are not on the Treasury Secretary's agenda. The intrigue stems from the fact that Paulson is one of 2008 Republican presidential frontrunner John McCain's closest informal advisors on economic policy. Another top advisor: investment banker Pete Peterson. Both would hardly fight the formation at some point over the next several years of a grand compromise to solve the U.S. deficit problem. Countering this advice is likely to be former Senator Phil Gramm (R-TX), another McCain adviser.
Notice that as a subset to this argument, most Washington politicians are fixated on the need for Congress to "fix" the alternative minimum tax problem within the tax code. The likely proposed course of action: raise taxes on the upper brackets to produce enough revenue to eliminate the alternative minimum tax increases now hitting upper middle class taxpayers, most of them in the Northeast. The upshot is that the Karl Rove political theory on taxes could soon be tested.
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|Title Annotation:||OFF THE NEWS|
|Publication:||The International Economy|
|Date:||Sep 22, 2006|
|Previous Article:||How to make good in Washington.|
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