ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Monday, February 3, 1997 TAG: 9702030124
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: Associated Press
The Clinton administration outlined plans Sunday for $100 billion in tax relief over the next six years, with almost half going to a child tax credit.
Republican budget writers, seeking a tax cut twice that size, offered half-hearted support.
The tax-relief proposal is a part of President Clinton's plan, to be announced Thursday, to balance the budget by 2002. It envisions $46.7 billion in cuts for a $500-per-child tax credit and cuts of $38.6 billion for various initiatives making higher education easier to obtain.
It also expands the income level on deductible Individual Retirement Accounts, eliminates the capital gains tax for most home sales and reduces the estate tax imposed on the death of a farmer or small business owner.
The $1,500 tax credit for the first two years of college and up to $10,000 in tax deductions for four years mean post-high school education will be free for most attending community colleges or state universities, White House Chief of Staff Erskine Bowles said on CBS' ``Face the Nation.'' ``It will be an enormously helpful thing to a family,'' he said.
Republicans, seeking broader-based tax relief of close to $200 billion in their balanced-budget plan, praised Clinton's proposals while questioning his targeted cutting approach.
``I'm generally positive about this,'' House Budget Committee Chairman Rep. John Kasich, R-Ohio, said on NBC's ``Meet the Press.'' But he said that under targeted cuts ``it's a government that basically says if you jump through this hoop, we'll let you keep some of your money.''
Rep. William Archer, R-Texas, chairman of the tax-writing Ways and Means Committee, issued a statement welcoming the proposal's direction, but said, ``I remain concerned that his tax cuts are temporary while his tax hikes are permanent. As a result, his total tax package may add up to another tax increase, not tax relief.''
The administration is looking at some $80 billion in new tax revenues, mostly on businesses and renewal of the expired airline ticket tax. About half that will come from ending what Office of Management and Budget Director Franklin Raines called ``unwarranted corporate subsidies.''
Negotiations with Republicans on a final tax cut package is likely to focus on GOP demands for a far broader capital gains tax reduction, and Raines said the administration ``would be willing to talk about'' a compromise. The administration plan covers an exclusion of $500,000 of capital gains for a couple selling a principal residence.
Administration officials emphasized that beyond that, capital gains relief is a low priority. ``It is not in our judgment the kind of thing that you should do when you have very scarce resources to spend on tax cuts,'' Treasury Secretary Robert Rubin said on ABC's ``This Week.''
The main items of the administration plan:
*A phased-in $500 tax credit for dependent children: $46.7 billion.
*HOPE scholarship tax credits of up to $1,500 a year, available for the first two years of post-secondary education: $18.6 billion.
*A phased-in $10,000 tax deduction for post-secondary education and training: $17.6 billion.
*Tax breaks for businesses offering educational assistance and exclusion for forgiveness of certain student loans: $2.7 billion.
*Expanded income limits on deductible IRAs to $70,000 ($100,000 joint): $5.5 billion.
*Exclusion of $500,000 ($250,000 singles) of capital gains from selling a principal residence: $1.5 billion.
*Tax incentives for distressed areas: $2.4 billion.
*A new welfare-to-work credit through Sept. 30, 2000, to encourage hiring of long-term welfare recipients: $0.5 billion.
*Small business and farm estate tax relief: $0.7 billion.
*Other initiatives, including extending expiring tax provisions and providing new incentives for economic development in Puerto Rico: $4 billion.
LENGTH: Medium: 75 linesby CNB