House taxwriters have tentatively agreed to start writing a tax-overhaul bill using the Senate bill`s lower income-tax rates: 15 percent and 27 percent for individuals and a top business rate of 33 percent.
The preliminary agreement, which lawmakers warned could change, was confirmed Friday by the House-Senate conference committee`s leaders, Rep. Dan Rostenkowski (D., Ill.) and Sen. Bob Packwood (R., Ore.), after a series of private sessions.
The bill passed by the House set the highest individual tax rate at 38 percent, compared with the current 50 percent, and provided for the steepest corporate rate to be 36 percent, now 46 percent.
”The House is willing to say: `OK, start with the Senate rates,`
” Packwood said.
”I indicated to Bob Packwood I`m satisfied to work with the 15 and 27 percent rate and their corporate rate,” said Rostenkowski, the Chicagoan who heads the House Ways and Means Committee.
But Rostenkowski warned the rates may not hold. ”When we start moving the dollars around and working in the special-interests vineyards, then we`ll make a decision whether we can do that,” he said.
”With all the things (the Senate conferees) want, they may have to come up with a higher rate,” said Rep. Charles Rangel (D., N.Y.).
One area of agreement, lawmakers reported, was to set the standard deduction at the Senate`s figures of $5,000 for taxpayers filing a joint return and $3,000 for those filing a single return. Currently, the standard deduction is $4,000 for joint-return filers and $2,900 for single-return filers.
The 22 conferees also agreed to increase the personal exemption to the Senate`s level of $1,900 in 1987 and $2,000 in 1988, with the amount adjusted for inflation in subsequent years. The current personal exemption is $1,080.
Senate taxwriters were unable to agree on where to find the more than $20 billion over five years needed to make their bill bring in the same amount of revenue as the current federal tax code.
Packwood said he expects most of the money to come from eliminating or curtailing corporate tax breaks.
But as the conference continues, there is expected to be pressure to find additional money to pay for income-tax deductions that the Senate bill eliminates or limits.
