ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Friday, April 11, 1997 TAG: 9704110082
SECTION: NATL/INTL PAGE: A-2 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: ASSOCIATED PRESS
Repealing the taxes would dig a gigantic hole in revenue - $350 billion - and make it harder to balance the budget.
Bowing to political and budgetary realities, Senate Majority Leader Trent Lott said Thursday that capital-gains and estate taxes would not be eliminated this year. His remarks came a day after House Speaker Newt Gingrich said he wanted both levies abolished.
``I personally don't think we should have taxes in either of those areas,'' Lott, R-Miss., told reporters. ``And I'll always be looking for an opportunity to vote to eliminate them. But I don't think we can get that all done in one year, when you're dealing with an overall budget situation.''
On Wednesday, Gingrich, R-Ga., said he wanted a zero tax in both areas. The estate tax is paid on large amounts of property when it is transferred after death. The capital-gains tax is paid on profits from the sales of land, stock and other property.
Last month, conservatives criticized Gingrich when he suggested that tax cuts be delayed until after Congress can write a budget-cutting package.
But Lott's remarks highlighted that though he and Gingrich want to keep conservatives happy, a drive to kill the two taxes would present daunting problems.
Congressional fiscal analysts say that over the next five years, the capital-gains and estate taxes are expected to produce at least $350 billion in revenue. Repealing them would dig a gigantic hole that would only toughen the job of White House and congressional negotiators seeking a deal for balancing the budget by 2002.
``The Republicans are moving in the opposite direction on tax cuts,'' said Senate Minority Leader Tom Daschle, D-S.D. ``As long as they keep moving that way, it's going to be difficult for us to find middle ground.''
In addition, many Democrats have long argued that cutting the two taxes would disproportionately help wealthy Americans, and President Clinton is highly unlikely to support eliminating the levies.
According to Congress' Joint Tax Committee, of the 2.3 million Americans who died in 1995, only 31,564 were subject to the estate tax, which applies only to estates worth at least $600,000.
``We can't find time to bring up proposals to help middle-class families,'' House Minority Leader Dick Gephardt, D-Mo., complained. ``It's mind-boggling that we have proposals being made to help the very, very richest families in the country.''
LENGTH: Medium: 54 linesby CNB