Newspaper article St Louis Post-Dispatch (MO)

House Restores Health Tax Deduction for Self-Employed

Newspaper article St Louis Post-Dispatch (MO)

House Restores Health Tax Deduction for Self-Employed

Article excerpt

The House passed legislation Thursday restoring a health insurance tax deduction for the self-employed.

Lawmakers took the action after Democrats castigated Republicans for dropping a separate provision targeting wealthy people who renounce their citizenship to avoid taxes.

"House Republicans, true to their form, want to make sure that every super-rich person in the country can have every possible tax break and tax advantage they can ever get," said House Minority Leader Richard A. Gephardt, D-Mo.

The bill, approved by the House on a voice vote, represents a compromise worked out Tuesday night by House and Senate negotiators and is expected to win Senate approval by the end of the week.

If enacted, it would permit 3.2 million self-employed people, from plumbers to lawyers, to deduct 25 percent of their health insurance on their 1994 returns, due April 17. Anybody who already has filed a tax return could file an amended return. Starting with 1995 returns, the deduction would rise to 30 percent.

But the bill's underlying purpose was obscured by acrimony over two unrelated provisions, one included in the legislation and one left out.

To help pay for the health insurance deduction, which will cost the Treasury $3.5 billion through 2000, the bill would eliminate a 17-year-old tax break for companies selling broadcast properties to minorities.

In so doing, the bill would undo the pending $2.3 billion sale of Viacom Inc.'s cable systems to a minority-led partnership. However, an earlier deal involving music producer Quincy Jones and the Tribune Co. of Chicago is protected. Jones is a partner with the Tribune Co. in the pending purchase of WNOL-TV in New Orleans and WATL-TV in Atlanta.

Democrats said that the program should be revised, not eliminated, and that the measure was the opening shot of a GOP effort to eliminate affirmative action programs.

The bill also helps pay for the health insurance deduction by tightening eligibility for the earned income tax credit for the working poor by phasing out the credit for families with annual unearned income of more than $2,400.

But most of the debate Thursday focused on the millionaire expatriates provision, a proposal by President Bill Clinton's administration that had been included in the original Senate version of the bill. …

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