Cheney attacks Kerry on taxes, defends bush record

10.45am

WASHINGTON - Vice President Dick Cheney accused Democratic presidential challenger John Kerry on Monday of planning huge tax hikes to pay for his proposals and called him "the most reliable pro-tax" vote in the US Senate.

Cheney, joining Republican efforts to paint Kerry as a classic tax-and-spend Democrat, said he was a senator "who opposed tax relief as a matter of principle and who voted against virtually every tax cut at every turn in the debate."

Less than two weeks after a speech in California attacking Kerry's foreign policy and security views, the vice president criticised Kerry's recent proposal to cut corporate income taxes and eliminate tax incentives for companies operating overseas as giving "a leg up" to foreign competitors.

He also accused Kerry of planning to eliminate many of the Bush administration's expiring tax cuts and said the Massachusetts senator faced a US$1 trillion gap in paying for his domestic spending proposals.

"It takes little imagination to figure out just how he would fill that tax gap -- a major new tax increase on the workers, entrepreneurs and inventors of this country," Cheney said in a speech to the US Chamber of Commerce.

Kerry has tried to make his tax proposals a focal point of his domestic agenda, painting President George W Bush as a friend to the wealthy, proposing a repeal of tax cuts for Americans who make more than US$200,000 ($310,900) a year and pledging to expand tax breaks for the middle class.

But Cheney offered a list of Kerry's tax votes, saying he had opposed a lower 10 per cent tax bracket and voted against reducing the tax rate on dividend income, repealing the estate tax and giving small businesses a higher expense deduction.

"All of these 'no' votes now form the basis of Senator Kerry's economic plan," Cheney said.

In response, the Kerry campaign released a long list of tax relief proposals he had supported, including expanding the 10 per cent tax bracket, eliminating the estate tax for small businesses and family farms and voting for faster marriage tax relief.

Kerry spokeswoman Stephanie Cutter said Cheney was "telling less than half of the truth" and "cherry-picking" Kerry's Senate votes during the debates on Bush's 2001 and 2003 tax cuts.

But Cheney, who also defended the Bush administration's economic record and said Bush's tax cuts helped end the recession, accused Kerry of making 73 new spending proposals and providing details of only 28 of them that alone would add US$1.7 trillion to US spending.

"Here we run up a basic math problem. Using a generous estimate, the senator's plan for higher taxes would raise some US$700 billion, so with US$1.7 trillion in extra spending that leaves a gap of US$1 trillion," he said.

The Kerry campaign has promised to release a full budget with his spending proposals and accompanying costs in the next few weeks.

Cheney slammed Kerry's proposal last week to eliminate a provision in US tax law that allows companies overseas to defer taxes on their foreign income, saying it would "give foreign competitors a leg up over American companies and result in the destruction of jobs here in the United States."

"You do not create jobs at home by punishing companies that trade overseas, by running away from international competition," he said.

- REUTERS