|  Home   |  Site Search   |  Tax News & Views  |

Extra Details on Tax Cuts Worked Out, Lott Says

Wednesday, May 14, 1997

OnLine

A letter to President Clinton outlining the details of the tax cuts in the balanced budget agreement has been agreed upon by congressional leaders, Senate Majority Leader Trent Lott, R-Miss., told reporters May 14.

Up to $35 billion of the $135 billion in gross tax cuts called for in the budget agreement will be targeted to education tax cuts, according to Lott’s description of the letter to the President. None of the $50 billion in tax increases will be raised from cuts to the earned income tax credit or to the low income housing credit, Lott said.

The letter has not been released, and will not be released until additional details are worked out on the spending portion of the agreement, congressional sources said.

The budget agreement called for a capital gains tax cut, estate tax relief, education tax incentives, a child tax credit, and expanded individual retirement accounts. Since the agreement was reached May 2, disputes between the White House and Congress have broken out over the details of the deal.

It is unclear whether the letter on taxes will pave the way for the House and Senate Budget Committees to mark up a budget resolution tomorrow. The House Budget Committee announced it will meet May 15, but it has previously announced a markup session, but then postponed it. The Senate Budget Committee has not announced its schedule.

The budget resolution outlines the spending and tax goals for the upcoming year, but does not contain details on policy changes, which are enacted as part of the budget reconciliation bill.

House Members Defend Ethanol Credit: Twelve House members led by House Ways and Means Committee member Rep. Jim Nussle, R-Iowa, sent a letter to House leaders highlighting the importance of the ethanol tax credit to the economy and a clean environment.

"Over time, the ethanol tax incentive has proven to be a non-inflationary stimulus that creates jobs, increases rural income, reduces our balance of trade, and saves the government money," the letter to House Speaker Newt Gingrich, R-Ga., and House Minority Leader Dick Gephardt, D-Mo., said.

The ethanol tax credit’s supporters increased their efforts recently in response to House Ways and Means Committee Chairman Bill Archer, R-Texas, comments that he favors eliminating the credit as part of the effort to eliminate the federal budget deficit.

House Ways and Means Committee member Rep. Jon Christensen, R-Neb., also signed the letter.