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October 20, 1995 - Image 8

Resource type:
Text
Publication:
The Michigan Daily, 1995-10-20

Disclaimer: Computer generated plain text may have errors. Read more about this.

8- The Michigan Daily - Friday, October 20, 1995

NAlract4lWoRub

Senate
approves
tax cuts
The Washington Post
WASHINGTON -- Republicans on
theSenateFinance Committee approved
a package of$245 billion in tax cuts for
families, investors and corporations
yesterday, batting down a volley of
amendments thrown up by Democrats
in a futile effort to shrink the bill.
The legislation, which now moves to
the Senate floor as part of a mammoth
reconciliation bill aimed at balancing
the budget by 2002, was hailed by Fi-
nance Committee Chairman William
V. Roth Jr. (R-Del.) as a historic pro-
posal that would spark a "dynamic,
growing economy" and lighten the tax
burden for middle-class Americans.
But the tax cuts outlined in that bill
still have far to travel on a torturous
road before they are enacted. Many of
the cuts will be modified in conference
betweenrepresentatives from the House
and Senate before being submitted to a
votebythe fullCongressandforwarded
to President Clinton.
Yesterday, Clinton, who wants much
smaller tax cuts,reiteratedhisintentionto
veto the emerging Republican package.
Finance Committee Democrats de-
cried the GOP tax cuts as unnecessary
and unfair. But with Republicans com-
manding an 11 to nine majority on the
tax-writing panel, their efforts to roll
back the provision were doomed to fail
from the start.
Alternately outraged, sarcastic and
resigned, the Democrats spent much of
yesterday'ssession putting forth amend-
ments crafted to highlight what they
regard as the inconsistencies and ineq-
uities oftheSenate tax-cutting effort. In
support of those assertions, Democrats
brandished estimptes by tax analysts at
the Treasury Department showing the
benefits of the GOP tax cuts would go
primarily to the rich.
Provisions in the tax bill debated in
theFinance Committee yesterday,com-
bined with cuts approved two weeks
ago by the panel in the earned-income
tax credit for the working poor, would
allocate 48 percent oftax benefits to the
richest 12 percent of American house-
holds -the 13.4 million families with
annual incomes of$100,000 or more-
according to the Treasury.
By contrast, the Republican propos-
_als would increase taxes for the 44
million with annual incomes of$30,000
or less, the Treasury said.
Republicans objected to lumping re-

Senators push fo
tax incentives,
enterprise zones

Senate Finance Committee Chairman William Roth (R-Del.) confers with Sen. Charles Grassley (R-lowa) yesterday.

ductions in the earned-income credit
with the tax cuts debated yesterday,
arguing that since about 85 percent of
the eamed-income credit is provided as
cash payments to beneficiaries, cuts in
the program should not be tallied as a
tax increase.
Sen. PhilGramm(R-Texas)saidthere
was nothing surprising about the fact
that poor people benefited less than the
affluent from a major tax cut. High-
income families got that way because
they worked hard, he contended, and
deserved the rewards of any tax cut.
"If you don't pay taxes, you don't get
a tax cut in our bill," Gramm said.
Democratic objections and amend-
ments were briskly dispatched by Roth,
who banged his gavel to silence mem-
bers exceeding their speaking time and
marched the group through to a vote on
the entire package by mid-afternoon.
Sen. Daniel Patrick Moynihan (D-
N.Y.), the panel's ranking Democrat
and former chairman, proposed two
amendments that would have scrapped
the Republican tax cuts altogether, us-
ing the revenue to either reduce the
deficit or restore GOPcuts to Medicare
and the earned-income credit.
An alternative offered by Sen. Bill
Bradley (D-N.J.) called for paring the
tax cuts to $170 billion, the amount of
additional revenue analysts at the non-
partisan Congressional Budget Office
estimate would be collectedby the Trea-
sury ifthe budget were balanced within
seven years.
Bradley ridiculed GOP provisions
that would extend tax breaks to football
coaches, gasoline station operators and
a host of other interest groups.

WASHINGTON(AP)-Sens. Spen-
cer Abraham and Joe Lieberman on
yesterday pushed their plan to stimulate
businesses in impoverished communi-
ties by granting tax incentives andelimi-
nating their capital gains tax.
Testifying before a Senate commit-
tee, the two senators said they were
trying to tack their plan onto the recon-
ciliation bill, which covers most gov-
ernment spending and will get an up or
down vote later this year.
"Recognizing that taxes constitute a
very real cost of doing business, we
seek to spur growth by allowing indi-
viduals and businesses to keep more of
what they earn in the areas that need
economic investment the most,"
Abraham (R-Mich.) told members of
the Senate Small Business Committee.
"Not enough is being done to help
those people who live and work in and
want to startbusinesses in the economi-
cally distressed urban and rural areas of
this country," said Lieberman (D-
Conn.).
Their bill, introduced last month, tar-
gets the same areas selected last year by
the Clinton Administration as Enterprise
Communities and Empowerment Zones,
but gives them an even bigger boost with
more tax breaks and incentives.
Abraham and Lieberman are focus-
ing mostly on the 95 "Enterprise Com-
munities"-60 ofthem urban and 35 of
them rural - which got far less in
grants and incentives than the Empow-
erment Zones.
The enterprise communities are re-
ceiving $3 million each in social ser-
vice block grants and tax-exempt bond
financing for businesses. The six urban
Empowerment Zones, including De-
troit, are receiving $100 million each in
social services grants, as well as tax
breaks for businesses over five years.
Among the 95 enterprise communi-
ties are the cities ofFlint and Muskegon
and Michigan's Lake County.
Specifically, the senators propose
zero capital gains tax for the sale of
business investments held in the desig-
nated areas after five years and an in-

Not enJogh I
being done to h
those people w
livye and work an
want to start
businessesin
economically
distressed uradn
and rural areas o
this country,"
- Sen. Joe Liebetmf
(D-C I'
come tax deduction up to $100,
year for those investing in sch bi
nesses.
The proposal also doJoe Letof i
nests expense deductions alod b
such businesses and provides M
tives for ownership of public housJ
Abraham's office said the bpop
would cost $4.2 billion over fiye y
The Congressional Budget O:sv
not yetgiven a cost estimate.
Sen. Dale Bumpers, a membe o
Small BusinesaCommitteequesti
why the senatortfocusedonprevi
selectedcommunities,enotingtherye
others that were impoverished in
state of Arkansas and could bwi
from the plan..
Abraham said he wanted to bul
the administration proposalto(in
"getting into a battle of geographsy
politics ... a situstion where we cr
change the political turf."-
Former Housing Secretary
Kemp testified for the plan.
"I think the real train wreck (inj
emiment) is if we don't do somethipi
this reconciliation bill to encV-ug
more jobs, more growth, more besib

"Giving a special deal to football complained about what he said was a
coaches - how's that going to make general hostility among Democrats to-
the economy boom?" Bradley sneered. ward legislation to boost private sav-
Roth dismissed such criticisms and ings and investment.

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