Congress will indulge in much sound and fury over taxes in April, but don't look for any real action until much later this year. The Senate is likely to get the ball rolling by approving a cut in Social Security taxes offered by Senator Daniel P. Moynihan (D-N. Y.). The cut will sail through because it will be part of a nonbinding budget resolution. The plan still faces opposition from Senate Finance Committee Chairman Lloyd Bentsen (D-Tex.), House Ways & Means Committee Chairman Dan Rostenkowski (D-Ill.), and the Bush Administration.
Bentsen will push ahead with a scheme to expand individual retirement accounts. But the new IRAs cost plenty of tax revenue--as much as $20 billion over five years--and new budget rules require Bentsen to offer offsetting tax increases. Meanwhile, the White House is holding back on a major push for a capital-gains tax cut, pending Federal Reserve Chairman Alan Greenspan's study of its impact.
In the end, pressures to extend expiring business-tax credits and to fix mistakes in last year's tax-increase bill will push Congress to consider seriously a revenue measure. Then, all of these floating tax plans will get their day in the sun. But odds are that action won't come until the fall.