Magazine article Nation's Cities Weekly

Tax Action Puts Municipal Priorities in Jeopardy Again

Magazine article Nation's Cities Weekly

Tax Action Puts Municipal Priorities in Jeopardy Again

Article excerpt

Senate Finance Committee Chairman Lloyd Bentsen (D-Tex.) and House Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.) completed negotiations behind closed doors on a major tax bill at midnight last Thursday in order to meet the March 20th deadline set out by President Bush for Congress last month.

The House and Senate were scheduled to vote on the compromise Friday after the Weekly went to press and then send it to the White House where it faces a certain veto.

The White House was prepared to issue a strong condemnation of Congress for failing to act on a tax bill if the compromise failed to reach the White House by Friday night, or, in the alternative, a strong condemnation of the compromise because it would propose tax increases on the wealthy in order to comply with the 1990 budget agreement and not increase the federal deficit.

The multibillion House-Senate compromise, HR 4210, includes versions of all the tax cuts proposed by the administration and a middle income tax cut. It also includes extensions of key expiring municipal provisions and some provisions to simplify and reduce the costs to cities and towns of issuing municipal bonds. The cost of the administration-proposed and middle income tax cuts are financed through higher tax rates on the wealthy and a millionaires' surtax.

The veto will leave the fate of key expiring municipal provisions in doubt, as there appears little chance for the President and Congress to reach agreement on another major tax bill this year. …

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