Suddenly, Everyone Wants To Cut TaxesBy
Washington has a bad case of tax-cut fever. Senate Finance Committee Chairman Lloyd Bentsen (D-Tex.) says: "The economy is dead in the water, and we have to jump-start it." House Minority Whip Newt Gingrich (R-Ga.) and Speaker Thomas S. Foley (D-Wash.) agree that Congress should provide a stimulative jolt before quitting for the year. Housing Secretary Jack F. Kemp, getting a headstart on an Administration that's still pondering its options, is calling for a tax summit to consider "emergency measures." Even curmudgeonly House Ways & Means Committee Chairman Dan Rostenkowski (D-Ill.) is faltering. He plans to lay out a scheme of his own within the next week or so. A tax cut that seemed inconceivable just weeks ago could be reality by yearend. It almost surely would include a cut in the tax on capital gains and a reduction in income taxes for middle-income families. It also will probably contain some kind of rate hike on the wealthy. But despite the growing clamor, there's no assurance that ideological differences can be bridged quickly enough to assure a deal this year. And there's no guarantee any quick-fix tax bill will do much to juice up the sputtering economy. "I doubt there will be much macro effect," says University of Michigan economist Joel B. Slemrod.
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