
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, March 14, 1992                   TAG: 9203140227
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A-1   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

DEMOCRATS' TAX PACKAGE OK'D

Democratic leaders Friday night rammed through the Senate a tax cut for 29 million middle-income families that would be financed by raising taxes on the nation's richest 800,000 people. President Bush has promised to veto it.

The vote was 50-47. No Republican voted for it; four Democrats voted no.

"This proposal is aimed specifically at those families that have taken the hardest hit over the last decade, and they are middle-income families with children," said Sen. Lloyd Bentsen, D-Texas, chief author of the bill.

Republican Leader Bob Dole of Kansas said the biggest benefits will go not to the middle class but to "the `ruling class' - the Democratic incumbents who only want election-year benefits for themselves."

A final compromise between the Senate bill and a similar House-passed plan probably will be worked out next week and sent to Bush by the March 20 "deadline" he imposed.

Although the Senate bill contains a version of the seven short-term tax changes that Bush proposed to stimulate the economy, he opposes it - and the House measure - because of the tax increase on the well-to-do.

At the heart of the Senate bill is a permanent tax credit of up to $300 a year for each child under 16 in families with incomes under $60,000. It includes tax-deductible Individual Retirement Accounts for all workers; deductions for interest on student loans; a capital-gains tax cut focused on middle-income investors in small business, and repeal of an unpopular luxury tax on expensive yachts, planes, jewels and furs.

The tax reduction, worth nearly $70 billion in 1992 through 1996, would be financed by raising taxes on the wealthiest 0.7 percent of all taxpayers.

This would be done chiefly by raising the current 31 percent top individual tax rate to 36 percent. That generally would affect single people whose total incomes exceed about $180,000 and couples above the $210,000 range. In addition, about 60,000 people with annual taxable incomes above $1 million would pay a new surtax of up to 10 percent.

by CNB