Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, March 15, 1995 TAG: 9503150057
SECTION: NATIONAL/INTERNATIONAL PAGE: NATL/INTL EDITION: METRO
SOURCE: From The Associated Press and Knight-Ridder/Tribune
DATELINE: WASHINGTON LENGTH: Medium
The House bill would provide a $500 per child tax credit for families making up to $200,000, expanded Individual Retirement Accounts, a 50 percent cut in the capital gains tax on investment, and an array of personal and business tax breaks worth $190 billion over five years.
Democrats offered a single amendment - to end the tax cuts after five years. After that was defeated, on a 21-14 party-line vote, they offered no further amendments and the committee adopted the package by the same vote.
``If you are a hard-working, overburdened American family, relief is on the way,'' said Ways and Means Chairman Bill Archer, R-Texas.
A study by the congressional Joint Committee on Taxation, a nonpartisan unit that analyzes tax bills, shows wealthier taxpayers would get the biggest dollar savings and would also experience the largest reduction in their overall tax rates.
However, the numbers also show that the top 13 percent of households would continue paying slightly more than half of all federal taxes under the GOP bill - just as they do now.
Tax fairness was the main topic as the committee debated the GOP bill. Citing Joint Tax and Treasury Department studies, Rep. Sander Levin, D-Mich., called the Republican proposal ``fiscally irresponsible and grossly unfair.''
Republicans accused the Democrats of waging ``class warfare'' and renewed their pledge to cover any and all tax cuts with spending reductions. ``Not one single cent of tax relief will be provided unless offset by spending reductions,'' declared Archer. He promised that Republicans would deliver the spending cuts before the full House votes on the tax-cut package, probably next month.
Democrats' refusal to participate further in the bill-writing session startled Republicans, who were prepared to work late into the night throughout the week. The capitulation marked an abrupt shift in tactics by the outnumbered Democrats, who recently spent many days in the same committee trying to soften GOP welfare changes.
``It wouldn't make any difference if we put up an amendment to have the American flag be red, white and blue with 50 stars, we couldn't pass it,'' said Rep. Jim McDermott, D-Wash.
The no-amendment stance, agreed upon by Democrats at lunch Tuesday, was taken to make it clear that Democrats favor deficit reduction over tax cuts, McDermott said.
Rep. L.F. Payne, D-Nelson County, who supported the balanced-budget amendment that ultimately failed in the Senate a month ago, held up a mock $3,100 check during Tuesday's debate.
He said it represented the amount a family of four spent last year to pay their share of the government's $203 billion interest payment on the national debt.
"The best way to ease this tremendous burden on American families is through long-term deficit reduction - not a short term irresponsible tax cut," Payne said.
That position veers sharply from the strategies of President Clinton and House Minority Leader Dick Gephardt, D-Mo., both of whom have offered separate tax-cut packages skewed away from upper-income people.
The cost of the tax-cut package mushrooms year by year, from $189 billion through 2000 to roughly $350 billion through 2002, the year by which Republicans promise to balance the budget. It approaches $700 billion over 10 years.
by CNB