Newspaper article THE JOURNAL RECORD

Panel Approves Higher Standard Tax Deductions

Newspaper article THE JOURNAL RECORD

Panel Approves Higher Standard Tax Deductions

Article excerpt

WASHINGTON (AP) - The House Ways and Means Committee, parting company with President Reagan on some major elements of tax overhaul, has given tentative approval to higher standard deductions while rejecting the $2,000-per-person exemptions recommended by the president.

As with all the decisions the committee is making behind closed doors in the search for a new tax system, the votes taken Tuesday are subject to change later. But for the moment, the panel's plan would:

%E Raise the standard deductions, which are used to reduce the taxable income of people who do not itemize, significantly higher than the president recommended.

Under present law, the deductions are expected to be $3,670 in 1986 for couples filing joint returns, and $2,480 for single people and heads of household, who usually are divorced women with children. The committee voted to raise those figures to $5,950 for couples, $4,775 for heads of household and $3,525 for single people. A taxpayer would get an additional $500 deduction for each dependent plus an extra $500 for being over 65 or blind.

%E Raise the personal exemption, now $1,080 for 1986, to $1,500, rather than the $2,000 figure that Reagan aides have called a non-negotiable part of his proposal. Reagan has labled this provision ""pro-family.''

The committee rejected amendments by Rep. Henson Moore, R-La., that would have substituted Reagan's $2,000 exemption. The key vote was a 24-12 split against the president's plan.

%E Increase the value of the earned-income credit, which benefits working families with children, and extend it to more families.

%E Repeal, as Reagan recommended, the special deduction of up to $3,000 a year for two-earner couples. …

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