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The Online Advisor - September 1999
Congress passes $792 billion tax cut
On August 5, 1999, both the House and Senate approved a ten-year, $792 billion tax cut. The bill, H.R. 2488, narrowly passed in the House with a 221-206 vote. The margin was even narrower in the Senate, with a 50 to 49 vote.
President Clinton has indicated that he will veto the bill when it reaches his desk. However, a review of the provisions in this bill may be an indicator of possible tax changes that might actually become law later this year or next.
Among the main proposals in the bill:
* A one-percentage point drop in tax rates, phased in from 2001 to 2005.
* A reduction in the marriage penalty.
* An increase in allowable contributions to retirement plans.
* Gradual elimination of the estate tax.
* An increase in tax breaks for education and health care expenses.
* A reduction of capital gains tax rates.
* Gradual phasing out of the alternative minimum tax.
* Numerous tax breaks for businesses, including an increase in the deduction allowed for business meals from the current 50 percent to 60 percent.
Most of the proposed tax cuts would become effective toward the end of the ten-year period; fewer than 1 percent of the cuts would come in 2000.