The $792 billion tax cut plan to be unveiled today by Senate Finance Committee Chairman William V. Roth Jr (R-Del.) includes substantial health care and education benefits as well as broad-based income tax relief, according to a staff summary.
The 10-year plan, somewhat smaller than the $864 billion GOP tax plan approved late Wednesday by the House Ways and Means Committee, would allow taxpayers to fully deduct premiums on health insurance and long-term care by 2006. It would also allow for increased student loan interest deductions and sweeten the tax benefits of prepaid college tuition savings plans.
Roth has previously announced key elements of his plan, which will be considered next week by the Finance Committee. The measure would also lower the bottom income tax bracket from 15 percent to 14 percent in 2001, expand individual retirement accounts and 401(k)s and provide breaks for estate taxes and married couples.
Married couples that currently jointly pay more in taxes than they would if they could file separately would be allowed to file single returns on a combined form. Other so-called "family tax relief" provisions would expand the tax exclusion for certain foster care payments, increase and expand the dependent care tax credit, and provide a 25 percent tax credit for employer-sponsored child care facilities.
"We want to reduce the marriage penalty, we want to help people get health insurance, we want to get people to be able to go to college, and we are targeting areas that are of a special concern to American families," Roth said yesterday.
The White House and congressional Democrats say that both Roth's and the Ways and Means Committee plans are far too large. House and Senate Democrats are working on alternative proposals of roughly $300 billion.
"We'll consider a cut that's modest but fair to all groups -- not a giveaway that's unfair to most," said Sen. Max Baucus (Mont.), a senior Democrat on the Finance Committee.
Unlike the House version, Roth's plan does not call for a reduction in the capital gains tax. Roth's bill also would permanently ensure that personal tax credits do not cause people to fall under the alternative minimum tax, allow the self-employed to fully deduct health insurance premiums beginning in 2000 and increase breaks for low-income housing.