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SIDES DEBATE TAX-CUT FAIRNESS

SHARE SIDES DEBATE TAX-CUT FAIRNESS

The administration disclosed Friday that the tax cuts President Clinton proposed in his nationwide speech wouldn't become fully effective until the year 2000.

Meanwhile, the White House and Republicans traded barbs over whose tax plan was fairest to the middle class. And the administration signaled it was not rejecting out-of-hand a GOP idea to cut capital gains taxes.Late Friday, the Treasury Department released details about the tax-cut plan. They showed that Clinton's proposed $500 tax credit for families with children 12 and younger and the $10,000 deduction for education expenses would be worth much less than that in 1996 when the program is to begin.

Eligible families would be able to get only a credit of $200 in 1996, rising to $300 in 1997, $400 in 1998 and then $500 in 1999 and thereafter.

The $10,000 deduction to eligible families for college and vocational education expenses would begin at $2,000 in 1996, rising by $2,000 per year until reaching $10,000 in 2000.

While Clinton said in his speech Thursday night that the tax cuts would be phased in, he did not spell out how it would be done or how long it would take. White House fact sheets highlighted the Jan. 1, 1996, starting date for the program.

Administration officials said they did not hand out the details sooner because Treasury was still checking the numbers. Officials said the longer phase-in period was needed to make the benefits less costly, thus requiring fewer spending cuts to pay for them. The administration put the cost of the tax package at $60 billion.

The timing for the tax benefits was not the only part of the president's plan still under review.

Administration officials said that there would be a series of meetings starting next week to make the final decisions on the budget cuts needed to pay for the tax reductions without inflating the deficit.

White House economic adviser Gene Sperling said it was possible that if budget cutters come up with additional money, the current proposed phased-in period would be accelerated.

"We are considering further cuts to speed up the phase-in period and also we may consider a couple of different ways to phase-in the deductions," Sperling said.

Republicans weren't waiting to see further details. They derided Clinton as a Johnny-come-lately to the tax cut debate and said their "Contract With America" campaign proposal was better because it offered more benefits to more people.

"Contract-light" was how incoming House Majority leader Richard Armey, R-Texas, described the Clinton program. "Ours is a much broader proposal and I think it's frankly a better proposal," he said.

With Republicans in control of both houses of Congress, GOP leaders let it be known that Clinton's package, which will be part of his 1996 budget request to Congress, would be drastically altered in the legislative process.

The proposal Clinton outlined in a televised address Thursday night would offer the country $60 billion in tax help through the $500 credit for families with children, a tax deduction for college or vocational eduction expenses and an expanded IRA.

Republicans repeatedly said they believed Clinton's program was not generous enough and the final proposal would be closer to theirs.