Small Business Tax Relief Sought As Debate Begins
Efforts to win tax relief for small businesses are finally under way after a slow start in the new Congress, but it's still unclear exactly what might be in any final tax-cut bill.
Business groups, including the U.S. Chamber of Commerce, are pushing hard for broad-based tax relief along with specific cuts to maintain economic growth.
The U.S. Chamber, for example, is calling for reduction or repeal of the capital-gains tax, the estate and gift tax, and the alternative minimum tax for business. It also advocates a speedup in the phasein of full deductibility of med ical-insurance costs for the self-employed.
The Chamber also wants extension of various tax credits important to small companies, including those for research and experimentation and for hiring disad vantaged individuals and welfare recipi ents.
Among the many tax-reduction propos als in Congress are those that seek cuta in capital-gains and estate taxes and an end to the so-called marriage penalty. Other proposals call for an across-theboard tax cut for all taxpayers. Under one proposal, such a cut would not take effect until there was a federal surplus that did not include Social Security reserves.
President Clinton has his own plan to use the budget surplus for shoring up Social Security and Medicare, with other portions going for individual savings accounts for all Americans and new spending programs. But in late February he indicated that he might support some targeted tax cuts if they didn't interfere with bolstering Social Security Meanwhile, GOP leaders in early March unveiled a plan to cordon off Social Security surpluses so they could not be used for tax cuts or new spending. Indeed, the amount available for tax cuts is linked to efforts to set aside a major portion of the overall budget surplus for Social Security (see the chart), as both the White House and GOP lawmakers strive to be seen as protectors of Social Security funds. Both GOP leaders and the White House have indicated that they want to spend more on national defense and education, although they differ on some priorities.
UPDATE NEW TOPIC
