United States Taxes

Highlighting what is sure to be an election-year point of contention with Democrats, a Republican lawmaker said his party favors using the government's projected budget surpluses to cut taxes. Rep. Rick White of Washington state said in the Republicans' weekly radio address that his party's plan protects the Social Security retirement program by ensuring that Social Security taxes are not spent on any other federal programs.

Charges on telephone bills to pay for cheap Internet hookups for schools and libraries could constitute an illegal tax, casting additional uncertainty over the politically touchy program, according to some of the House's top tax lawmakers. The House Ways and Means Committee's oversight subcommittee held a hearing on the matter, which is before a federal appeals court in New Orleans.

This week's House approval of a bill to abolish the complicated U.S. Tax Code may be a longshot to make it into law. But it's a bull's-eye for the small-business lobby on Capitol Hill. A far-flung signature campaign initiated last fall by the National Federation of Independent Business (NFIB) culminated Wednesday in a narrow 219-209 victory for the measure, which requires Congress to scrap the current code by 2002 in favor of something simpler.

The House, bridging bitter divisions among Republicans, approved a budget Friday that would cut taxes and spending far more than in last year's landmark budget-balancing agreement between the White House and GOP leaders. The budget, which was approved, 216 to 204, calls for cutting spending by $101 billion over five years and using the proceeds to cut taxes on couples hit by the so-called marriage penalty.

Responding to an election-year clamor from conservatives and the tantalizing appeal of a burgeoning budget surplus, congressional Republicans are stampeding to reduce the "marriage penalty"--a peculiarity of the tax code that forces millions of Americans to pay more in taxes simply because they have tied the knot. Even Democrats, who have generally been cool to tax cuts this year, are finding it hard to resist this one. "I can count votes," said Senate Minority Leader Tom Daschle (D-S.D.

Senate leaders are trying to revive a stalled tobacco bill with an attack on the "marriage penalty," which forces some married couples to pay more taxes than they would if they were single. "The tax cut proposals, if they could be added, they would actually improve its chances," Senate Majority Leader Trent Lott (R-Miss.) said. The negotiations began with an amendment sponsored by Republican Sens. Phil Gramm of Texas and Pete V. Domenici of New Mexico to eliminate the so-called marriage penalty.

In an effort to forge ahead on the massive tobacco control legislation, the Senate Wednesday embraced a major reduction in the "marriage penalty" tax. The tax cut, added to the bill as an amendment, would be funded with some of the money raised by the measure's proposal to raise taxes on cigarettes by $1.10 a pack over five years. These tax revenues had been targeted for other purposes, including anti-smoking public health programs.

The Senate appeared on the verge of a breakthrough on the stalled tobacco bill Tuesday as lawmakers agreed to use some of the money generated by the measure to fight drugs and pay for tax cuts--including reducing the so-called marriage penalty. Both amendments were demanded by Republicans as the price of allowing the legislation to proceed. The sharp change in the bill's fortunes--on Sunday, Senate Majority Leader Trent Lott (R-Miss.

With President Clinton's backing and strong bipartisan support in Congress, a bill to freeze new taxes on goods sold over the Internet is likely to pass next month, despite opposition from most of the nation's governors. "There should be no special breaks for the Internet, but we can't allow unfair taxation to weigh it down and stunt the growth of the most promising new economic opportunity in decades," Clinton said Thursday while attending the Technology 1998 conference here.

You say that you're a cynic about all things--society, taxes and even love? You can get a big bang out of the tax law, if you are willing to let that cynicism take over and guide your life--or rather your marital status--on a practical, rather than romantic, course. No doubt every true cynic wonders: Do I need to marry or divorce? It depends. In some circumstances, the words "I do" open a trunk full of tax savings.