Roth: Use Surplus for Across-the-Board Tax Cut, Fixing Marriage Penalty or Other Options

Thursday, December 4, 1997

OnLine

If there is a budget surplus next year, Congress should cut taxes across the board, attack the marriage penalty, or provide other targeted relief, depending on the size of the excess, Senate Finance Committee Chairman William Roth, R-Del., wrote Senate Majority Leader Trent Lott, R-Miss., Dec. 3.

"Given the real possibility of a budgetary surplus next year ... I would like to expeditiously move to provide a tax cut for the American people," Roth wrote. The economy is outperforming expectations so many budget analysts predict the budget deficit for fiscal 1998 will be even lower than current estimates, thus providing the opportunity for further tax cuts.

Roth indicated his first choice would be to cut taxes across the board, but he acknowledges that the surplus may not be large enough to accomplish that feat.

Other less-costly options identified by Roth include expanding tax-favored education benefits or individual retirement accounts, eliminating the marriage penalty, and increasing the exemption for the alternative minimum tax to ensure middle-class families are not subject to it. This list is not exclusive, he added.

Others express different views

House Ways and Means Committee Chairman Bill Archer, R-Texas, earlier asked the Joint Committee on Taxation staff to examine ways to eliminate the limitation on itemized deductions, reduce the phaseout of the personal exemption, and ameliorate the effects of the so-called marriage penalty.

Other members of Congress, such as House Budget Committee Chairman John Kasich, R-Ohio, argue that any surplus should be used to reduce the budget deficit. Others still, such as House Transportation Committee Chairman Bud Shuster, R-Pa., say that any surplus should be applied to transportation spending.

Roth also asked Lott to ensure that the Finance Committee retains its right to write the tax bill next year. The Senate Finance Committee was bypassed during the closing days of the first session of the105th Congress when the bill to expand education IRAs to cover primary and secondary education went directly to the Senate floor.

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