Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: SATURDAY, March 21, 1992                   TAG: 9203230143
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A-1   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

BUSH VETOS DEMOCRATS' TAX CUT

Both votes - 211-189 in the House and 50-44 in the Senate - were far short of the two-thirds margins needed to override the veto. But they were enough to get the $77.5 billion tax cut to Bush before the midnight "deadline" he had set in his State of the Union message.

Virginia's Republican Senator, John Warner, voted against the bill while Democrat Charles Robb voted for it. Among Virginia's House delegation, all Republicans voted against it. Democrats Owen Pickett of Virginia Beach and Norman Sisisky of Petersburg also opposed the bill; all other Virginia Democrats voted for it.

Minutes after the Senate vote, Bush signed a message that he was rejecting the bill.

"The Democrats in Congress could not resist their natural impulse to raise taxes," he said in a campaign speech from the White House. "But I will assure you this, I simply will not let them do it."

The bill would raise taxes on the wealthiest 1 million taxpayers and reduce taxes for about 78 million couples and individuals.

"Much of what the president asked for is in this bill," said House Majority Leader Richard Gephardt, D-Mo. "But there's more: real relief for small-business people and there's real relief for hard-working, hard-pressed middle-income families."

Senate Republican Leader Bob Dole of Kansas said, "When working and earning America sees the Democrats' tax bill they'll call it something else - a disaster." He said the tax increases on the wealthiest 1 percent of Americans would destroy jobs.

Republicans ridiculed the main tax cut - a credit of up to $300 for middle-income families - as hardly the price of a candy bar.

"People who do not have jobs can't benefit from a middle-income tax cut," said House Republican Leader Bob Michel of Illinois. "You have declared economic warfare on every American family - and in the name of fairness," he told Democrats.

"Fairness" was the name of the game for Democrats, who see a potent political issue in advocating a tax cut for the broad middle class. Republicans found no attractive way to pay for a middle-class cut of their own, so focused instead on cutting taxes for businesses and investors.

In the end, the Democratic bill, written chiefly by Rep. Dan Rostenkowski, D-Ill., and Sen. Lloyd Bentsen, D-Texas, included a version of six of the short-term economic stimulus provisions recommended by Bush.

These include a capital-gains tax reduction whose benefits would go mainly to the middle class but which would allow millions of families to sell their homes and pay no tax on the profit. Also borrowed from Bush were a new incentive for businesses to buy machinery this year, special relief for real estate developers and penalty-free IRA withdrawals to buy a home or pay tuition or medical expenses.

VETOED TAX BILL\ PROVISIONS\ \ Principal cut would be two-part credit, subtracted directly from taxes owed: This year and next, up to $150 a year for single people making $50,000 or less and $300 for couples up to $70,000. Permanently starting in 1994: a maximum $300 credit for each child under 16, available for singles or couples up to $70,000.\ \ Fully deductible Individual Retirement Accounts would be available to all wage earners. Workers could open a new type IRA with no immediate deduction but no tax on interest earned.\ \ Earned-income credit would be expanded for working families with earnings under $21,250.\ \ Tax break for student-loan interest would be restored.\ \ Maximum tax rate would be raised from 31 percent to 36 percent. That would affect couples with taxable incomes - after deductions and exemptions - above $140,000 and single people above $115,000. A new surtax of up to 10 percent would be imposed on taxable incomes over $1 million.\ \ Luxury tax on yachts, planes, furs and jewels would be repealed. The luxury- car tax would be retained, but the $30,000 threshold at which it is triggered would be raised each year to offset inflation.