Clinton Compromises Republicans on Taxes

Clinton Compromises Republicans on Taxes

Tuesday, July 1st, 1997 -- President Clinton moved a teensey bit to the left yesterday when he announced a "compromise" plan to cut taxes $85 billion over the next five years. The White House feels the House and Senate versions of the budget favor the more affluent. So, what's new?

Clinton wants to assure low-income Americans that they will be eligible for the child tax credit. Republicans say that low income workers already pay little or no income tax -- so why should they get a credit as well? The White House is also opposed to indexing capital gains tax reductions, saying it would increase revenue loss in later years. Clinton proposes a 30 percent exclusion on capital gains for investments held more than one year and home sales capital gains of $500,000 and under would also be free of capital gains taxes for couples. Sorry, singles, you get only $250,000!

Always eager for more tax money, the Senate would increase the federal cigarette tax by 20 cents per pack. The Senate plays us for fools, saying at least part of the money will go for child health care, but children's health care was already an issue, so the new tax would simply replace expenditures already planned and loosen other funds for pork spending. Small rifts over the child tax credit are also in play. The White House wants to force down, slightly, the maximum income qualifying for the credit.

Estate taxes, always a favorite of the wealthy, are getting a huge exclusion boost -- from $600,000 now to $1,000,000 under the House and Senate plans. Clinton, who thinks Democrats might be weakened in the MidWest, offers an additional carrot to farmers, most of whom have been swallowed up by big agribusiness -- an additional $900,000 for a whopping total of $2.1 million tax free.

Now I ask you -- if farmers are so poor that they need 120 percent more exclusion than anyone else, why would the figure be a whopping $2.1 million!?

All in all, the White House proposal is a big yawn. The basic gimmes for the wealthy remain intact while the President, to ease his not-to-obvious liberal guilt, is posturing to look concerned about the average Jane and Joe.