However, among a host of other emerging economic factors, sky-rocketing energy prices and weak retail sales over the holiday season signal that the U.S. economy may be hitting the brakes. As consumers hold more tightly to their wallets, signs of a downturn have put the heat on policy makers to find the magic formula that will ease the economy back on the right track. As chairman of the Senate Finance Committee, which has jurisdiction over federal tax policy, I will lead an effort in Congress to set the right fiscal climate that will help rejuvenate consumer confidence. Giving people back more of their own money can do wonders. And from a philosophical stand-point, notwithstanding my commitment to debt reduction, I'd much rather have surplus tax dollars stay with the folks who earned them.
History has a way of repeating itself.
The mere scent of a surplus can eat a hole through lawmakers' pockets. Eliminating the marriage penalty, reducing estate taxes and reducing marginal tax rates fall within those two priorities. Enhancing retirement savings incentives and keeping more middle-income families assigned to a lower tax bracket would also address issues of fairness. Calls for accelerating a tax relief package and making it retroactive to Jan. 1 also may be considered to provide a soft landing for the slowing economy. The new president is expected to make tax relief a cornerstone of his agenda.