Bush to propose tax cuts in speech Wednesday

By Alan Elsner, Political Correspondent

WASHINGTON, Nov 29 (Reuters) — Texas Gov. George W. Bush will propose a series of tax cuts in a speech on Wednesday that could help shape the race for Republican presidential nomination in 2000, his campaign said on Monday. The Des Moines Chamber of Commerce said the Republican front-runner would deliver a major address to the group on Wednesday and Bush campaign officials said it would contain his long-awaited tax package. Tax cuts have become a staple of any Republican presidential campaign so BushÕs formula, which advisers have been working on for weeks, will receive careful scrutiny from his presidential rivals and from the Democrats.

Bush leads the field for the Republican nomination by a wide margin in national polls but is locked in a tight race with Arizona Sen. John McCain in New Hampshire, which will stage the crucial first primary of the campaign next Feb. 1.

The son of former President George Bush, the Texan is running on a slogan of "compassionate conservatism" which he defines as finding ways to take care of poorer Americans without expanding the role of government or limiting the free market system.

TAX POLICY PRINCIPLES

On his Internet campaign home page, Bush says he supports the following principles for tax policy:

  • Cuts in marginal tax rates and a "fairer" system.
  • Phasing-out the death tax.
  • Reducing the marriage penalty under which married couples pay more income tax than they would if they remained single.
  • Tax incentives to encourage charitable giving.
  • Relief for "working families on the outskirts of poverty."
  • Expanding education savings accounts.

Bush's plan is likely to come under attack by publisher Steve Forbes, who has been trying to portray himself as the "true conservative" in the Republican field and has been trying to brand Bush as a closet liberal. Forbes favours abolishing the progressive income tax and replacing it with a 17 percent flat rate for all. BushÕs program will explicitly reject this approach, campaign sources said. Grover Norquist of Americans for Tax Reform, an influential conservative group, said he would be watching especially to see whether Bush followed McCain and Forbes by supporting a permanent ban on taxes on Internet commerce. A current three-year moratorium runs out in October, 2001. Norquist has also been pressing the bush campaign to abolish an across-the-board 3 percent communications tax levied on telephone calls. Sources said the Bush plan would try to avoid the appearance of favouring the rich. For years, Democrats have routinely reacted to Republican tax-cutting proposals by branding them as schemes to help the rich get richer. In 1996, Republican presidential nominee Bob Dole proposed an across-the-board 15 percent reduction in income tax but the scheme was generally ignored by voters.

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