Senate Works Toward IRS Overhaul
WASHINGTON (AllPolitics, March 31) -- The Senate Finance Committee is working toward a vote on a bill to curb the power of the Internal Revenue Service and extend new rights to American taxpayers. Included is an overhaul of procedures governing payment of tax-penalties. The projected cost of the proposed changes is $6.4 billion. One of the main sticking points is the $1.3 billion it would cost to remedy the tax code to help divorced women and others who say they're wrongfully targeted for the tax debts of their spouses. Only 75,000 people a year, or 1 percent of all taxpayers, stand to benefit from the expensive change.
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Not Taxing Some Of The Rich
WASHINGTON (AllPolitics, March 31) -- Here's something to think about as you finish up this year's tax returns: some fairly wealthy Americans pay no income tax at all. A new study by the Internal Revenue Service of people earning more than $200,000 a year shows 1.137 of them escaped taxes in 1994. The most popular loophole, used 38 percent of the time, was the deduction for interest payments on money borrowed for investment. Other popular deductions: 18 percent were for net casualty or theft losses; 9 percent were for medical and dental expenses. Despite those deductions, an IRS spokesman says 99.9 percent of all wealthy Americans do pay taxes. A survey of unaudited information taxpayers report to the IRS provided the information.
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House Democrats Criticize 1997 Tax Bill
WASHINGTON (AllPolitics, March 31) -- Four House Democrats who voted against the 1997 Taxpayer Relief Act denounced the bill Tuesday as one of the worst tax bills in recent memory. The group criticized the bill for further complicating the tax code with 285 new sections and 824 amendments. They also said that while the legislation was billed as a middle income tax cut, it primarily benefits the wealthy. Rep. Pete Stark (D-Calif.) declared, "The richer you are, the more benefits you get, the less you pay." Joining Stark in the critique were Reps. Robert Matsui (D-Calif.), Rep. Peter DeFazio (D-Ore.) and Rep. David Obey (D-Wisc.). The lawmakers appeared with a group called Citizens for Tax Justice and another group called "Responsible Wealth," made up of wealthy Americans who are donating their capital gains tax relief to charitable projects or just giving it back to the Treasury Department.
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