"Every seat in the largest hearing room on the House side of the Capitol was filled, and lobbyists lined the walls often two and three deep." 1993: Senate: 57D, 43R...House: 258D, 176R, 1ind.
May 14, 1993, "The Clinton Tax Bill; Clinton proposal for tax increases passes first test," NY Times, David E. Rosenbaum, Washington, May 13
"President Clinton's plan to raise the taxes of almost all Americans in order to lower the Federal budget deficit passed its first big test in Congress today.
The House Ways and Means Committee, the first committee to get a crack at the tax measures, made some changes around the edges of the President's proposals but approved the main elements intact. The vote was 24 to 14, with all the Democrats in favor and all the Republicans opposed.
The legislation would raise taxes for individuals and businesses by a total of nearly $250 billion over the next five years, one of the largest tax increases in American history. The bill is almost certain to be passed the week after next by the full House of Representatives. But the outlook for the President's program in the Senate, where the Democratic majority is less solid than it is in the House, is much chancier. The final legislation could be quite different from what the committee approved today.
At the White House, George Stephanopoulos, Mr. Clinton's communications director, said, "The President is delighted that the Ways and Means Committee and all the other relevant committees were able to pass so much of his deficit reduction package in such a short period of time with so few changes."
Representative Dan Rostenkowski, the Illinois Democrat who heads the Ways and Means panel and a strong Clinton ally, called today's vote "the first step in deficit reduction." He added: "We've got a President in the White House that's leading, and we've got a Congress that's following.""...
to two counts of mail fraud. The Chicago Democrat served 36 years in the House of Representatives and 15 months in federal prison. The pol, who chaired the powerful House Ways and Means Committee, was pardoned in 2000 by President Bill Clinton. He died in August 2010 at the age of 82." image from The Smoking Gun]
(continuing): "His committee took the President's bill as a starting point and made only two substantial changes, both affecting businesses: it rejected his proposal for an investment tax credit for businesses, and it voted to raise the tax rate on corporate profits, now 34 percent, to 35 percent instead of 36 percent as the President requested.
The bulk of the higher taxes in the bill, as the President proposed, would fall on wealthy individuals. No one with with an income below $100,000 would get a higher income tax rate. But almost everyone would feel the effect.
For example, a new tax on fuel would cost a typical family, according to the Treasury Department's calculations, about $200 a year in larger utility bills and higher prices for gasoline and other products and services. The cost could be higher for families who drive long distances or live on farms.
The cost of the energy tax would be offset at least in part for workers earning less than about $30,000 by an expanded earned-income tax credit, which is a tax break for workers with lower incomes.
To win broader political support, the committee made small changes in the President's bill to give help to aluminum, agriculture and real-estate interests. But unlike tax bills of the past, this one does not appear to have any provisions that help a single company or individual.
"There is no intention of the chairman or anyone else to sneak something into this bill," Mr. Rostenkowski said.
The small changes in the Clinton program were made this week by the panel's Democratic members, meeting around a conference table in a closed room with the Republicans excluded.
When the full committee met in the open today, every seat in the largest hearing room on the House side of the Capitol was filled, and lobbyists lined the walls often two and three deep.
After a staff explanation of the changes in the President's proposals, the committee voted to remove the lobbyists and reporters and met privately.
Then, Republicans offered seven amendments, including one that would have dropped the fuel tax. All were defeated on straight party-line votes in a process lasted less than an hour.
Representative Bill Archer of Texas, the top
Republican on the committee, contended that "the biggest tax increase in
the history of the world" was drafted behind closed doors.
But Mr. Rostenkowski observed that tax bills have almost always been handled that way, regardless of who was President or who was chairman of the Ways and Means Committee. He said he did not want his members to have to look to lobbyists in the audience for thumbs up or thumbs down signals before they spoke or voted.
The bill's biggest blow would be to the wealthiest taxpayers, who now face an income tax rate of 31 percent and Medicare taxes on only the first $130,000 of their earnings.
Under the measure, those with taxable incomes above $250,000, married or single, would be taxed at a top rate of 39.6 percent. Single taxpayers with taxable incomes from $115,000 to $250,000 and couples with taxable incomes from $140,000 to $250,000 would have a top rate of 36 percent.
In addition, high-income workers would have to pay the 1.45 percent Medicare tax on all their earnings. The rate on capital gains would remain 28 percent. Some critics argue that the gap between the capital gains rate and the top tax rate could lead to the re-introduction of the kinds of tax shelters that Congress eliminated several years ago.
Deloitte and Touche, the accounting firm, calculated today that a couple with two children and an adjusted gross income of $250,000 would pay $71,538 in income taxes, $5,614 more than under the current law.
The committee's bill did not address the proposal Mr. Clinton made in New York on Wednesday to have all tax increases placed in a trust fund designated for deficit reduction.
About $145 billion of the five-year tax increase in the bill would come from the higher rates and expansion of the Medicare tax. The new rates would be applied to income earned this year. The lifting of the wage ceiling on Medicare taxes would come next year.
The second-biggest revenue raiser, about $70 billion over five years, would be the new fuel tax, which would go into effect next year. The tax would mostly be passed on to consumers, who would see it on utility bills, at the gasoline pump and in the price of many products and services like airline travel.
This tax faces strong opposition in the Senate, but it is too early to predict how it will fare there. The Senate Finance Committee will take up the tax measure next month.
President Clinton has contended that the energy tax would not only raise a large amount of revenue to help reduce the budget deficit but would also contribute to conservation and improve the environment.
The other major tax increase involving individuals would apply to upper- and middle-income retirees. Retired couples with incomes (adjusted gross income plus tax-exempt income and half of their Social Security payments) of $32,000 and single retirees with incomes above $25,000 would have to pay taxes on up to 85 percent of their Social Security benefits. Now, they are taxed on only 50 percent.
In addition to raising the corporate tax rate by one percentage point, the committee approved these other tax changes affecting businesses:
But Mr. Rostenkowski observed that tax bills have almost always been handled that way, regardless of who was President or who was chairman of the Ways and Means Committee. He said he did not want his members to have to look to lobbyists in the audience for thumbs up or thumbs down signals before they spoke or voted.
The bill's biggest blow would be to the wealthiest taxpayers, who now face an income tax rate of 31 percent and Medicare taxes on only the first $130,000 of their earnings.
Under the measure, those with taxable incomes above $250,000, married or single, would be taxed at a top rate of 39.6 percent. Single taxpayers with taxable incomes from $115,000 to $250,000 and couples with taxable incomes from $140,000 to $250,000 would have a top rate of 36 percent.
In addition, high-income workers would have to pay the 1.45 percent Medicare tax on all their earnings. The rate on capital gains would remain 28 percent. Some critics argue that the gap between the capital gains rate and the top tax rate could lead to the re-introduction of the kinds of tax shelters that Congress eliminated several years ago.
Deloitte and Touche, the accounting firm, calculated today that a couple with two children and an adjusted gross income of $250,000 would pay $71,538 in income taxes, $5,614 more than under the current law.
The committee's bill did not address the proposal Mr. Clinton made in New York on Wednesday to have all tax increases placed in a trust fund designated for deficit reduction.
About $145 billion of the five-year tax increase in the bill would come from the higher rates and expansion of the Medicare tax. The new rates would be applied to income earned this year. The lifting of the wage ceiling on Medicare taxes would come next year.
The second-biggest revenue raiser, about $70 billion over five years, would be the new fuel tax, which would go into effect next year. The tax would mostly be passed on to consumers, who would see it on utility bills, at the gasoline pump and in the price of many products and services like airline travel.
This tax faces strong opposition in the Senate, but it is too early to predict how it will fare there. The Senate Finance Committee will take up the tax measure next month.
President Clinton has contended that the energy tax would not only raise a large amount of revenue to help reduce the budget deficit but would also contribute to conservation and improve the environment.
The other major tax increase involving individuals would apply to upper- and middle-income retirees. Retired couples with incomes (adjusted gross income plus tax-exempt income and half of their Social Security payments) of $32,000 and single retirees with incomes above $25,000 would have to pay taxes on up to 85 percent of their Social Security benefits. Now, they are taxed on only 50 percent.
In addition to raising the corporate tax rate by one percentage point, the committee approved these other tax changes affecting businesses:
*Small businesses would be permitted to deduct up to
$25,000 a year for the purchase of equipment. The limit is now $10,000.
*Companies could not deduct the portion of an executive's salary above $1 million.
*Only half the cost of business meals and
entertainment would be deductible, down from 80 percent now.
*Deductions for lobbying expenses and for
executives' club dues, except for airline and hotel clubs, would no
longer be allowed.
*A portion of capital gains from stock in some small
businesses would be excluded from taxation.
The committee rejected a tax break -- the exemption of ethanol from the fuel tax -- that President Clinton proposed and that would have helped an important political contributor, Dwayne O. Andreas.
He is chairman of the Archer-Daniels-Midland Company, which makes most of the ethanol produced in this country.
Ethanol is made from corn, and one argument for exempting it from the tax was that the step would benefit farmers. Instead, the panel decided to exempt gasoline and diesel fuel used on farms from part of the energy tax. Many farmers would also benefit from the panel's decision to raise the inland waterway fuel tax by 50 cents a gallon instead of the $1 requested by Mr. Clinton. The tax, now 17 cents a gallon, is imposed on diesel and other liquid fuels used by barges carrying grain.
Representative Peter Hoagland, a Nebraska Democrat who pays close attention to agriculture issues, said farmers were happier with the bill as it came out of the committee than they were with the President's proposals.
To help aluminum companies, the bill would exempt them from part of the tax on energy they consume. The companies successfully argued that electricity was an integral part of their production process, not just a source of fuel. The Kaiser Aluminum Company + is the largest industrial employer in Spokane, Wash., the hometown of the House Speaker, Thomas S. Foley."
The committee rejected a tax break -- the exemption of ethanol from the fuel tax -- that President Clinton proposed and that would have helped an important political contributor, Dwayne O. Andreas.
He is chairman of the Archer-Daniels-Midland Company, which makes most of the ethanol produced in this country.
Ethanol is made from corn, and one argument for exempting it from the tax was that the step would benefit farmers. Instead, the panel decided to exempt gasoline and diesel fuel used on farms from part of the energy tax. Many farmers would also benefit from the panel's decision to raise the inland waterway fuel tax by 50 cents a gallon instead of the $1 requested by Mr. Clinton. The tax, now 17 cents a gallon, is imposed on diesel and other liquid fuels used by barges carrying grain.
Representative Peter Hoagland, a Nebraska Democrat who pays close attention to agriculture issues, said farmers were happier with the bill as it came out of the committee than they were with the President's proposals.
To help aluminum companies, the bill would exempt them from part of the tax on energy they consume. The companies successfully argued that electricity was an integral part of their production process, not just a source of fuel. The Kaiser Aluminum Company + is the largest industrial employer in Spokane, Wash., the hometown of the House Speaker, Thomas S. Foley."
..................................
https://www.senate.gov/history/partydiv.htm
.............
No comments:
Post a Comment