Edwards proposes repeal of some Bush tax cuts

Democrat John Edwards said on Thursday if elected president he will try to rewrite the U.S. tax code, repealing tax breaks for wealthier Americans and funneling some of the money to low-income families.

It's time for us to put our economy back in line with our values, Edwards said in a speech in Des Moines, Iowa.

Currently running third in the Democratic race behind Sens. Hillary Clinton of New York and Barack Obama of Illinois, Edwards is trying to position himself as the leader of ideas in the race for his party's nomination for the November 2008 election.

He took a subtle jab at Clinton, whose husband, President Bill Clinton, prided himself on a policy of triangulation -- finding middle ground among competing interests.

We can't triangulate our way to big change. We can't compromise our way to big change. We need to lead the way to big change, said Edwards, the party's 2004 vice presidential nominee.

Edwards would take away some of the tax cuts that President George W. Bush considers a boon to U.S. economic growth but which Democrats complain benefit mostly the wealthy.

Edwards would repeal tax cuts for families earning more than $200,000 a year and increase the tax on capital gains investment profits from 15 percent to 28 percent.

Edwards was promptly attacked by conservative groups, with the Republican-leaning Club for Growth saying he had declared a war on prosperity in a desperate attempt to drive home his lefty bona fides and revive his faltering campaign.

If there is any lingering doubt about John Edwards' bristling hostility towards economic growth in this country, all doubts should be laid to rest with John Edwards' announcement of yet another tax hike today, the group said.

The conservative Americans for Prosperity also charged Edwards' plan to increase capital gains taxes would smash middle-income retirement nest eggs.

The former North Carolina senator, who has declared a war on poverty in America a central part of his presidential campaign, would also declare war on offshore tax havens.

If we want a truly fair tax system, then we also have to end the injustices in our system that allow many wealthy people and corporations to avoid taxes altogether, he said.

Having taken some criticism for doing consulting work for a New York-based hedge fund, Edwards would attempt to crack down on a tax loophole that allows some managers of these lightly regulated investment funds to pay dramatically lower tax rates than most Americans.

Other Democratic candidates, such as Clinton, have made similar proposals on cracking down on hedge funds.

In his speech, Edwards took on a populist tone, attacking the power of lobbyists to manipulate the writing of legislation in the U.S. capital to benefit the wealthy and powerful at the expense of regular people.

Washington is broken. The system is rigged. Cronyism and corporate interests prevail over fairness and the best interests of the American people, he said. Washington puts Wall Street before Main Street.

Edwards would take some of the billions from the repeal of the tax cuts and help millions of lower income Americans by providing them a dollar-for-dollar match on up to $500 a year of their savings.

Edwards would expand tax credits to help families pay for child care and expand the anti-poverty Earned Income Tax Credit.