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U.S. News Archive
March 01 - March 06, 2001

 

 

 
This page contains news for the period March 01, 2001 through March 06, 2001.  

<< March 2001  >>

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Tuesday, March 6, 2001

House approves Bush tax cut

A story released today by the Associated Press reports that the Republican-controlled House voted Thursday for an across-the-board tax cut of nearly $1 trillion over the next decade, giving President Bush a vital victory early into his term.

The vote was 230-198 in favor of the reductions at the heart of the president's economic program, and came over the objections of Democrats who said the cut was too large and catered to upper-income taxpayers.

``One house down, and now the Senate to go,'' stated Bush moments after the vote as he delivered the news to an audience in North Dakota. ``The American people had a victory today. The American family had a victory today. The American entrepreneur had a victory today.''

Approval of Bush's plan sent the bill to an unpredictable fate in the Senate, where a pivotal bipartisan group of lawmakers expressed concern about the $958 billion price tag.

``Who among us can say that the economy doesn't need a little encouragement,'' said Speaker Dennis Hastert, R-Ill., as the House debated the priority piece of legislation of the new president. Additionally, he said, cutting taxes ``will give consumers more money to pay off credit card bills. It will give families more money to pay off high energy bills. It will give parents more money to pay for education expenses.''

House Democratic Leader Dick Gephardt of Missouri commented that the plan was so big it would complicate the efforts of paying down the national debt and would make it more difficult to safeguard programs such as Medicare and Social Security. Stressing the complaints that the GOP was favoring upper-income taxpayers, he added, ``If we're going to deliver tax relief let's deliver it to people who need it.''

The legislation would gradually lower and condense the current five graduated income tax rates of 15 percent, 28 percent, 31 percent, 36 percent and 39.6 percent. By 2006, rates would be pegged at 10 percent, 15 percent, 25 percent and 33 percent.

To provide immediate relief, the measure would also create an interim 12 percent bracket, retroactive to Jan. 1, 2001, applied to the first $12,000 of taxable income for couples and $6,000 of taxable income for individuals.

Officials said that would translate to a maximum tax cut this year of $360 for a couple and $180 for an individual.

Beyond that, the administration reiterates that when the plan is fully phased in six million families who now pay taxes would no longer be required to.

At the direction of Hastert and other GOP leaders, House Republicans are expected to advance other elements of Bush's larger tax cut program to the floor over the next several weeks, including ``marriage penalty'' relief, a child tax credit and estate tax relief or repeal.

In a strong show of unity, all 219 Republicans who voted did so in support of Bush's plan. Ten Democrats crossed party lines to vote with them. One independent also supported the measure.

Opposing the plan were 197 Democrats and one independent.

House Democrats crafted an alternative, knowing in advance it was a futile attempt on their part but eager to highlight competing budget priorities. It was rejected on a vote of 273-155.

Their plan called for $586 billion in tax cuts over 10 years, little more than one third the size of the GOP measure. It would lower the tax rate from 15 percent to 12 percent on the first $20,000 of income for a couple, and provide marriage penalty relief and an additional break for lower-wage earners. Unlike the GOP measure, it includes no reductions in the income tax rates that apply further up the income ladder.

It also provided more money for national debt reduction than the GOP measure ,a priority that consistently rates high in public polling.

Democrats forced a series of time-consuming votes on parliamentary matters in an effort to protest the Republicans' decision to advance the tax cut before completing work on an overall tax and spending plan.

Moderate and conservative Democrats debated saying they are ready to support higher tax cuts than other members of their party, provided they fit into a plan that also reduces the debt and cover other obligations.

``I know of no prudent business person'' who would follow the example of the Republicans, said Rep. John Tanner, D-Tenn.

``But we have a surplus this year, and we want to help American taxpayers this year,'' countered Rep. Tom DeLay, R-Texas, the GOP whip.

The day was consumed with debate that echoed of the presidential campaign, in which Bush argued that the surplus belongs to the taxpayers, not the government.

``The government shouldn't spend money it doesn't have or give away money it might need,'' said Rep. Dennis Kucinich, D-Ohio.

Rep. Clay Shaw, R-Fla., was on his feet arguing, ``This is the taxpayers' money. It's not the government's money.'' He also added, ``It is our obligation to let American taxpayers keep more of what they earn.''

The legislation would likely be bogged down in the Senate, which is divided 50-50 along party lines. To avoid a filibuster by Democrats, Republicans must first win approval of the type of overall tax and spending plan that House Democrats sought.

Bush faces a challenge beyond that, since nine senators coming from both parties called for a news conference on Wednesday subscribing the idea of a ``trigger'' that would make tax cuts conditional on progress in paying down the debt. The Bush administration has vowed to fight that idea.

 

Monday, March 5, 2001

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The March issue of Money Magazine contains a major article about money management and financial planning for unmarried adults.  In addition to a general introduction, the article contains segments for the following sub-groups of single people: young singles, no kids; older singles, no kids; single, but attached; and single, with kids. 

The premise of the story is that when it comes to finances, single people are different.  It describes how each sub-group of singles developed a plan for dealing with his/her financial needs, especially with regard to achieving a secure future. A fair amount of sensible advice is given for each of the various types.

Singles have different life stages from the typical nuclear family. Articles in publications like Money, Kiplingers, and other newspapers and periodicals often make recommendations based on classical life goals like: 1) saving for the downpayment on a first home (short term goal); 2) saving for a child's college education (medium term goal); 3) saving for retirement (long term goal); and 4) managing investments for steady income during retirement.

Many singles purchase homes later than their married counterparts. And a great many of them, especially those who do not have children, may not have the wake-up call of a classical medium-term goal (saving for a child's college education.)  Sometimes, when single people read these articles, they may feel as though they are not being included.

This March, 2001 article in Money Magazine was a very welcome change.  There was a specific focus on our needs and life stages.

Three of the people interviewed in the article are members of AASP.  We also gave the author ideas for the story.  To read the full article, click here.

 

Friday, March 2, 2001

Key House panel approves tax rate cut

A story published today by Reuters reports that the tax-writing House Ways and Means Committee on Thursday approved an across-the-board cut in income tax rates, the centerpiece of President George W. Bush's $1.6 trillion tax cut plan.

The committee voted 23-15, along party lines, for a major reduction in tax rates to be phased in over five years, while creating a new lower tax bracket of 12 percent for the first $12,000 of income for married couples and $6,000 for single people and making it retroactive to Jan. 1, 2001.

That rate bracket would be phased down to 11 percent in 2003 and 10 percent in 2006. Reductions for other tax rate brackets would begin in 2002. By 2006, the current five brackets of 39.6, 36, 31, 28 and 15 percent would be lowered to four -- 33, 25, 15, and 10 percent.

The bill, which would lower federal revenues by an estimated $958 billion over 10 years, is expected to go to the Republican-controlled House of Representatives for a vote possibly next Thursday and is expected to pass.

The Ways and Means Committee approved the sweeping rate cuts after rejecting a Democratic alternative the Democrats said would get more money into the hands of lower- and middle-income families faster than Bush's plan and at about half the cost to federal revenues.

The Democrats' bill would create a 12 percent rate bracket for the first $10,000 of income for a single taxpayer and the first $20,000 of income for married couples. There would be no change in higher tax brackets under the Democratic plan. It also would expand the earned income tax credit for poor working families.

House Republican leaders said they planned to act later on the remaining parts of Bush's tax cut plan, which
includes increasing the child credit and phasing out the estate tax.

"We are looking at the estate tax repeal, we are looking at the marriage penalty, we are talking about the child tax credit going from $500 to $1,000, we are talking about the inheritance tax ... the AMT (alternative minimum tax)," House Speaker Dennis Hastert told reporters.

Millions of taxpayers may not benefit fully from the rate cuts because of the AMT. The AMT was created to ensure wealthy taxpayers did not claim so many breaks that they paid no taxes.

A growing number of taxpayers are paying the AMT because it is not indexed for inflation. According to the Joint Committee on Taxation, the number of taxpayers paying the AMT under current law will grow to 20.7 million in 2011 from 3.5 million currently.

With the rate reduction, 5.3 million taxpayers would pay the AMT in 2002, and by 2011 that number would grow to 35.7 million.

Thomas said the AMT would be addressed as the committee dealt with other pieces of the Bush tax cut plan. But the bill to be voted on Thursday will provide AMT relief only for families with three or more children.

Iran will spy on unmarried couples on the nation's ski slopes

A story published today by Reuters reports that Iran has set up its first mountain police units to patrol the ski slopes and enforce the country's strict Islamic law on separation of the sexes, the conservative Kayhan daily reported on Saturday.

Skiing resorts close to the capital Tehran have in recent years become a favorite venue for rich young Iranians to meet away from the prying eyes of conservatives.

"The trained police will warn or confront skiers over any immoral act they might witness," the paper said.

The mountain police force, composed of men and women on skis, will also assist injured skiers, the daily added.

Since the 1979 Islamic Revolution, unmarried Iranian men and women have been forbidden to socialize in public places. Before the election of moderate President Mohammad Khatami in 1997, ski slopes were strictly segregated according to sex.

Thursday, March 1, 2001

House approves allowing incentive for Colorado welfare recipients to marry

A story released today by the Associated Press reports that the Colorado House of Representatives approved a bill Wednesday that would establish financial incentives for welfare recipients who get married.

The House voted 35-26 to send House Bill 1338 to the Senate. The bill would allow counties to offer incentives and decide how much money to give.

Opponents argued that there was no guarantee the marriages would last. They said a better way to encourage marriage would be to remove legal provisions that discourage it.

"This is akin to a shotgun wedding," said Rep. Fran Coleman, D-Denver. "Will it last, would it be good for the children? This money isn't well-placed and I don't think we should ask it of the counties."

Rep. Shawn Mitchell, R-Broomfield, said many couples who are living together and receiving welfare benefits do not get married because they believe they will lose their assistance.

"This will soften that loss," he said.

Opponents from both parties said the proposal did not feel right.

"There are other ways to keep a family together than taking your pocketbook out," said Rep. Bill Webster, R-Greeley.


Low income singles without children excluded from tax relief in New Jersey

A story published today in the Bergen Record reports that the tax burden on New Jersey's working poor families has gotten a bit lighter this year, but 170,000 low-income singles were excluded from the tax relief.

Under changes in the state tax laws, New Jersey families who made less than $15,000 in 2000 will not have to file state income tax forms or pay tax. In addition, families who made less than $20,000 will be able to file for a state Earned Income Tax Credit, a payment modeled on a federal tax break for the working poor.

As an example, a family of four at the poverty-level income of $17,601 will go from paying $168 in state taxes for the 1999 tax year to receiving a state tax refund of $109.

But advocates for poor families said the tax break is still less generous than the federal government's program.

"New Jersey's made great progress, but there's certainly room for improvement," said Jeannette Russo, a fiscal policy analyst with the Association for Children of New Jersey, based in Newark.

New Jersey's Earned Income Tax Credit is limited to families making under $20,000 with at least one child, compared with the federal limit of $27,000. Also, the federal Earned Income Tax Credit allows adults without children to claim the credit; New Jersey's is only for families.

As a result, about 450,000 people in New Jersey can claim the federal EITC, but only about 280,000 can claim the state's EITC.

"There's no reason for New Jersey to be so stingy, because the cost of living is high here," said Jon Shure, president of New Jersey Policy Perspective, a think tank in West Trenton.

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