WASHINGTON – The Republican-led House yesterday passed the largest tax cut in nearly 20 years, but President Clinton’s veto threat means it’s still a long way from showing up on IRS forms.
The 10-year, $792 billion package won on a 223-208 vote. Only four Republicans, including upstate Rep. Jack Quinn, opposed it – and six Democrats supported it.
Clinton, who has called any tax cut above $300 billion “too risky” to the booming economy, yesterday left no doubt about what he’ll do if it gets through the Senate and reaches his desk.
“I will veto it,” he said at a community college in Lansing, Mich.
The Senate plans to vote next week on a very different tax-cut plan – although it’s the same size, at $792 billion.
The confusion makes it almost impossible to say exactly what, if any, tax cuts will show up on IRS forms next year.
Clinton and the Republicans will either compromise and approve a smaller tax cut, or they’ll fight over the issue during the election season.
The centerpiece of the House plan is a 10-percent across-the-board rate deduction on personal income taxes.
The House plan also includes a repeal of estate and alternative minimum taxes, breaks for education and health care, and a capital-gains tax cut.
The centerpiece of the Senate plan is a reduction in the bottom tax bracket from 15 percent to 14 percent. It also would expand IRA contribution limits and deductions.
Clinton’s main complaint is that the large cut doesn’t set aside enough money to pay for education, Medicare and reduce the national debt.
Republicans counter that the Congressional Budget Office has determined that the GOP plan would reduce the debt by more than Clinton’s plan.
Pete Sepp of the National Taxpayers Union predicted some tax cuts would survive the messy lawmaking process, but he said only one group is guaranteed to come out a winner – accountants.
“Most accountants are rubbing their hands together, and taxpayers are left scratching their heads,” Sepp said.
“Somewhere between the person on the street and Congress there are a bunch of lobbyists and political demagogues saying that kind of tax relief is unfair,” he said.