WASHINGTON-Officials of tire industry associations are generally pleased with the passage of President Bush's $1.35 trillion tax cut package, which was signed into law June 7.
But they are disappointed to varying degrees in the passage of Senate committee chairmanships to the Democrats with the May 24 change of Sen. James Jeffords of Vermont from Republican to Democrat-allied independent.
The Rubber Manufacturers Association and the Tire Association of North America said they were taking a watch-and-wait attitude to see what happens in the Senate over the next few months. However, the International Tire & Rubber Association feared that the Senate changeover might jeopardize Senate passage of a House-approved bill to exempt small businesses from Superfund liability.
Approved 240-154 in the House and 58-33 in the Senate, the tax bill concentrates on reductions for individuals over the next 11 years. It creates a new minimum tax bracket of 10 percent, down from the current 15 percent; eliminates the tax penalty for married couples filing jointly; gradually doubles the child tax credit; and increases the annual contribution limit for individual retirement accounts and 401(k) plans.
Its main business benefit is in the field of the estate tax. It increases the amount of property exempt from the tax, from $1 million in 2002 to $3.5 million in 2009, before repealing the tax altogether in 2010. Groups such as TANA and ITRA have long advocated the repeal of the estate tax, to protect tire dealers, retreaders and other small family businesses from being sold upon the death of the founders just to pay the tax.
The RMA and ITRA, but not TANA, belong to the Tax Relief Coalition, a group that supported the president's tax package. ``This bill is very important to the American public,'' said Ann Wilson, RMA director of government affairs. ``It provides some necessary tax breaks for taxpayers and for the economy.''
TANA, however, is disappointed that the bill doesn't accelerate the repeal of the estate tax, which was set to sunset in 2010 anyway. ``Our next goal is to see if we can accelerate that,'' said Becky MacDicken, TANA director of government affairs. ``But with Jeffords' latest switch, I don't think it will happen during the next two years.''
Although Ms. Wilson and Ms. MacDicken said the switch in power in the Senate over to Democrats will change their legislative strategies somewhat, they don't believe the Senate's current direction will change very much.
``It's important to note that the votes in the Senate haven't changed,'' Ms. Wilson said. ``It's all the more important now for those who govern to govern in a bipartisan way.''
``We still will try to work on a bipartisan basis anyhow,'' Ms. MacDicken said. ``We will just have to work on the Democratic side more closely.''
ITRA, however, is disappointed in particular to lose two GOP Senate committee chairmen who were friendly to the retreading industry, according to ITRA Government Relations Director Roy E. Littlefield III. These are Charles Grassley of Iowa, chairman of the Senate Finance Committee, and Bob Smith of New Hampshire, chairman of Senate Environment and Public Works.
Ironically, Mr. Jeffords is Mr. Smith's likely successor in the wake of Mr. Jeffords' defection from the Republican Party. Mr. Littlefield and ITRA members in New England had scheduled a June 21 meeting with Mr. Smith in New Hampshire to discuss possible Senate passage of the Superfund small business liability reform bill, Mr. Littlefield said.
``Now Jeffords is in, and he's never even been on the committee,'' he said. Mr. Jeffords also has a reputation as an environmental activist, and differs openly with the Bush administration on key environmental issues.
``We worked so hard on this for many years, and now we're back to Square 1,'' Mr. Littlefield said. But ITRA will still meet with Mr. Smith-who still will be a ranking minority member on the committee-and will try to arrange a meeting with Mr. Jeffords in Vermont, he added.