Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, February 21, 1992 TAG: 9202210098
SECTION: NATIONAL/INTERNATIONAL PAGE: A2 EDITION: METRO
SOURCE: Los Angeles Times
DATELINE: WASHINGTON LENGTH: Medium
HOUSE DEMOCRATS OK TAX CUTS
The House Democratic Caucus grudgingly approved a package of election-year tax cuts Thursday after removing a controversial provision that would have reduced income taxes for corporations.The approval means that the full House will be asked to choose among three tax-cut plans next week: the Democratic bill, the package that President Bush proposed Jan. 28, and a streamlined version of the president's plan put together by House Republicans.
Democratic House leaders said Thursday they believed they would be able to muster enough votes to defeat both Bush's package and the GOP plan, then enact their own plan and send it to the Senate.
House Speaker Thomas Foley, D-Wash., told reporters after the caucus session he was confident that the Democratic alternative would prevail. "This does more for tax fairness, this does more for economic equity," he said.
But several lawmakers warned that sentiment for the package was so thin during Thursday's caucus that it still was unclear whether enough Democrats ultimately would support the measure, even without the reduction in the corporate rate.
"It's going to be very tight," said Rep. James Moran, D-Va., who emerged from the caucus early after listening to both sides. "There are going to be a lot of people who hold their noses and vote for this - probably myself included."
Participants in the caucus said that opposition to the proposed cut in the corporate tax rate was the most strongly voiced sentiment in the session, but that some members objected to virtually every major provision in the bill, even to enacting any tax cut at all.
Apparently weighing heavily on some members' minds was the victory of former Massachusetts Sen. Paul Tsongas in the New Hampshire primary Tuesday. Tsongas is the only major Democratic presidential candidate who opposes the Democratic tax-cut plan.
The centerpiece of the Democratic plan is a $200-a-person tax credit aimed at helping middle-income taxpayers, combined with a reduction in tax rates on capital gains, which are profits from the sale of stocks or other assets, and breaks for business and real estate.
It would pay for these tax cuts by raising taxes on the rich, increasing the maximum tax bracket for those earning $85,000 or more to 35 percent, from 31 percent now, and imposing a 10 percent surtax on millionaires.
Bush's plan would provide a similar menu, but would provide a less-generous tax break for middle-income Americans and would postpone it until next January, and would pay for the tax cuts by changing the accounting rules for some portions of the federal budget.
Thursday's approval by the caucus came after a contentious closed session in which members expressed strong reservations about various portions of the bill, forcing a poll on a proposed 1 percentage-point cut in corporate tax rates that led to eliminating it.