Tax cuts but no `big ideas' in Bush's presidential pitch

GEORGE W BUSH launched his long-awaited economic platform yesterday, promising lower taxes all round, especially for the working poor and married couples, but no radical overhaul of the system.

Mr Bush, the front-runner for the Republican presidential nomination, was addressing the Des Moines Chamber of Commerce in Iowa, just 36 hours before he joins the five other Republican hopefuls for a televised debate - the first time the Governor of Texas has pitted himself directly against his rivals at such a forum.

The components of Mr Bush's economic programme, which had been keenly argued inside the campaign team, were heavily "spun" in advance as key building blocks in Mr Bush's philosophical edifice of "compassionate conservat- ism", and addressed several popular grievances.

As well as aiming to narrow the "poverty gap" by lowering marginal tax rates, Mr Bush offered a reduction in what is called the "marriage penalty", under which double-income couples (in higher brackets) find themselves paying more tax than if they were single; and the phasing out of death duties.

The "marriage penalty" has been a particular cause of the political right, which says that it sends the wrong message about marriage; separate taxation - as permitted in Britain - has not been an option.

Death duties are an increasing issue as the US population ages, and arouse strong feelings among well-to-do pensioners, who constitute a growing proportion of voters. All Mr Bush offered, however, was phased reductions, not the abolition many have sought, and he was immediately criticised by some of his rivals for timidity and eschewing "big ideas".

In particular, Mr Bush declined to embrace any of the more sweeping proposals that are circulating on the political right - including the "flat tax" advanced by the millionaire publisher Steve Forbes, which would shift the burden of taxation from income to purchasing and close the many loopholes that exist.

Economic policy, especially taxation, is an area fraught with risk for the Bush campaign. Mr Bush's team includes several advisers who worked with his father when he was President. George Bush Snr's retreat from his campaign promise - "Read my lips; no new taxes" - is widely blamed for his defeat in 1992 and, although some economists contend that Mr Bush's policies actually paved the way for the current economic boom, this is a hard argument to sell to voters whose experience of prosperity is associated with the Clinton administration, not with the recession-hit years of Mr Bush's presidency.

Until this week, Vice- President Al Gore fought shy of capitalising on his association with Bill Clinton, apparently believing that the Lewinsky affair could overshadow the country's economic success in voters' minds. However, Mr Gore, who could face George W Bush in the presidential election if he wins the Democratic nomination, used his two latest speeches to pre-empt Mr Bush's pronouncements on the economy and attack what he presented as the Texas Governor's profligacy. "Let's face it," Mr Gore told an audience in Washington on Monday, "those who don't remember recessions of the past are doomed to repeat them." He called Mr Bush's tax-cutting proposals a "scorched earth policy" that would bring a return to budget deficits.

Tax cuts no longer appear to work the political spell that they once did. Mr Clinton lost no support this autumn when he vetoed the Republicans' tax-cutting budget; opinion polls showed that voters favoured using the budget surplus to support the state pension system and reduce the national debt. Mr Gore picked up this theme, pledging that if elected: "I will reduce the national debt in every year of my presidency."

Comments