Lighting Director Jim Tetlow goes through last-minute preparations Wednesday inside Wait Chapel on the campus of Wake Forest University. (AP)

Bush plans new defense of tax cut

Gore likely to attack in debate tonight

By Michael Kranish, Globe Staff, 10/11/2000

WASHINGTON - When George W. Bush decided last year to build his campaign around a $1.3 trillion tax cut, his biggest worry was that his plan provided too small a break for the top rate-payers. After all, the man he initially feared most in the primaries, Steve Forbes, was proposing reductions that went twice as deep.

Yet tonight, as Bush prepares to face Vice President Al Gore in North Carolina in the second of three presidential debates, Bush's plan to slash income tax rates - in addition to eliminating the estate tax - has become perhaps the most important issue in the campaign. Gore has slammed Bush's proposal, saying it earmarks 43 percent of his tax cuts to the wealthiest 1 percent of Americans, and Gore shows no signs of letting up the attack.

Bush advisers, buoyed by a series of polls released yesterday that show the governor may have pulled slightly ahead of Gore, are urging Bush to stick by the tax plan but to recast his defense of it. In Boston, Bush complained that Gore was using ''fuzzy math'' and the governor defended his plan, in part, by saying the wealthiest Americans deserve a tax break, too.

Tonight, the Bush game plan is for the governor to describe the plan as a ''tax reform'' proposal that resolves inequities in the code and encourages new investment, Bush economic adviser Lawrence Lindsey said in an interview. Other Bush aides said they realize that simply defending the tax cut as a needed break for the wealthy doesn't attract many new voters, while the notion of reform is more likely to resonate.

The Gore strategy, meanwhile, is to continue to pound away at the Bush tax plan as an unfair giveaway to the rich, while also trying to focus more attention on Bush's plan to partially privatize Social Security. In addition, Gore is expected to try to draw more attention to Bush's estate tax cut plan, which would affect only 60,000 families but is one of the governor's most costly proposals.

But if the candidates once again focus mainly on a snarl of competing numbers, they risk turning off much of the audience, analysts warned.

''There is more to substance than just numbers,'' said Katy Harriger, associate professor of political science at Wake Forest University, where the 9 p.m. nationally televised debate is to be held. ''There is articulation of a vision and values. Otherwise, it just gets mind-boggling when they throw the numbers back and forth.''

Harriger said Bush's challenge is to show he has command of his facts, while Gore must ''take the edge off, tone down the deep sighs and interruptions.''

A series of new polls suggest slight gains for Bush. Polls for CNN/Gallup, the Pew Research Center, and all found the race a virtual tie but with Bush apparently building a slight advantage. Ralph Nader, the Green Party nominee, is holding on to 4 to 5 percent support but remains a factor, running especially strong in some states with a heavy emphasis on the environment, such as Oregon. As a result, one of Gore's challenges tonight is to attract support from what should be a natural constituency, environmentalists and those who agree with his assertion that he is fighting for ''the people, not the powerful.''

Bush has also benefited over the past week from the impression that he at least exceeded his campaign's low expectations of him as a debater. And his running mate, Dick Cheney, was widely perceived as the winner of last week's vice presidential face-off. Tonight's informal format, in which Bush, Gore, and moderator Jim Lehrer will sit at a table, is much more to Bush's liking than last week's requirement that both men stand behind lecterns.

Gore, who was criticized last week for loudly sighing and exaggerating some statements, said on CNN yesterday that he will be more careful tonight. ''It's important to get all the details right and I'll do my best to do better on that,'' Gore said, adding that he would have ''less sighing in this debate.''

Bush, meanwhile, is being coached by his staff to explain the logic behind his tax cut plan rather than simply repeat his assertion that Gore is using fuzzy math.

Bush usually does not argue, as Ronald Reagan did in 1980, that a massive tax cut for top income-earners would spur growth with a ''trickle down'' effect on the economy. (That has not stopped the Gore campaign from running ads this week that portray the tax cut plan as the latest incarnation of trickle-down economics.) Nor is there much doubt that the wealthiest Americans already are overwhelmingly supportive of Bush.

Mostly, Bush argues that the wealthy deserve a break like everyone else and get a bigger tax cut because their taxes are too high.

But the rationale behind Bush's proposal is more complicated than that.

Late last year, Bush's biggest concern about the primaries was that Forbes would expand upon his 1996 base by trumpeting his proposal for a 17 percent ''flat tax.'' For months, Bush said he was considering an alternative idea, with aides occasionally suggesting the governor might put forward a ''flatter tax.''

In the end, Bush rejected the advice of his most conservative advisers and did not propose a flat or flatter tax. Instead, he proposed slashing the top rate from 39.6 percent to 33 percent. He also proposed a break for middle- and lower-income Americans, lowering the lowest tax bracket from 15 percent to 10 percent.

Bush spokesman Ari Fleischer, asked whether the governor came up with his tax proposal due to pressure from Forbes, responded: ''I think that is a fair statement.'' But Fleischer stressed that Bush also wanted a plan that eliminated inequities in the tax code and provided a cut for all Americans.

The key to understanding Bush's tax cut plan is that the biggest single benefit isn't a cut in income taxes; it is the elimination of the estate tax.

For example, Lindsey, the Bush economic adviser, said that Gore is ''inventing'' the idea that 43 percent of the Bush tax cut goes to the wealthy. Instead, Lindsey said that 21 percent of the benefit goes to the wealthiest 1 percent. The reason for such a wide disparity between the Gore and Bush views of the Bush tax plan is that Gore includes the elimination of the estate tax as part of a tax cut for the wealthy, while Bush does not.

In any case, Gore does not provide nearly the same benefit to the wealthy as Bush. The Gore plan would leave the 39.6 percent top tax rate in place. The bulk of the Gore tax plan would benefit lower-income Americans and middle-income earners who are sending their children to college. While Gore does propose to cut the estate tax, the benefit is geared to the owners of family farms and small businesses.

The Gore estate tax cut is also much smaller. For comparison, the Bush cut would cost $280 billion over 10 years, while the Gore plan would cost $11 billion, according to the campaigns.

The government collected about $28 billion in estate taxes last year from about 50,000 to 60,000 families, with about half of the tax paid by 3,000 families, according to Robert McIntyre of the labor-backed Citizens for Tax Justice.

As it turned out, Bush's concern about Forbes was misplaced. Forbes did poorly in the primaries and Bush's top competitor was Senator John McCain of Arizona, who, like Gore, criticized Bush for providing such a large tax cut for the wealthiest Americans.