Hastert ‘outraged’ over tax plan

By Laura Grandt

Democratic presidential hopeful Wesley Clark has proposed a plan attempting to ease the slouching economy that, among other things, affects small businesses.

Speaker of the House Dennis Hastert (R-Ill.) does not think so.

Clark’s plan, outlined in the transcript of a speech given in September, includes reversing tax cuts passed by President George Bush and using the money in three areas: homeland security, state and local governments and tax incentives for businesses who hire new employees.

“[Clark’s] tax plan is to undo what Bush did,” said Michael Peddle, associate professor of public administration.

It will reverse tax cuts and use the money elsewhere, which is nothing unique, Peddle said.

When he heard Clark’s plan, Hastert was “outraged,” said Peter Jeffries, director of communication and special legislative programs at Hastert’s office.

Jeffries said the plan will raise taxes for 23 million small-business owners who create economic growth and jobs. This is not the answer in a “struggling” economy, he said.

According to “conventional wisdom,” raising taxes will slow down an economy, Peddle said. He also pointed out, however, that decreasing interest rates are supposed to help an economy according to the same wisdom, and so far that has not happened.

“[President Bush’s] intention in the tax cuts was to stimulate the economy, and there’s a difference of opinion as to how successful that was,” Peddle said.

Jeffries said repealing tax cuts would affect economies like DeKalb’s because of dependency on small businesses like farms and “mom-and-pop” operations.

He said the 23 million small businesses fall in the top 1 percent of those whose taxes would be repealed.

Marilyn Oestreicher, owner of Tommy O’s Family Restaurant, 107 S. Sacramento St., Sycamore, said her business has been more impacted by increased competition than the slumping economy.

She said her business was helped only slightly by Bush’s tax cuts, but that repealing those cuts probably would hurt a little as well.

Peddle said Clark’s proposed plan could work in a positive or a negative way for businesses depending on how it was executed, which was not specified in the speech.

Illinois probably would not benefit from the plan because it is not one of the states where changes in federal rates determine how much the state collects from taxes, Peddle said. However, this also is dependent on the way the plan is executed.

“Right now, I’m not sure anybody knows what’s going to work,” Peddle said.