Tax defeat comes at bad time for Carter

Press, 12 August 1978, Page 8

Tax defeat comes at bad time for Carter

i NZPA-Reuter Washington President Carter has suffered another big setback in ICongress on his domestic ■programmes, this time over taxation.

j The House of Representatives has defeated Mr Career’s latest plan to cut Fed■eral income taxes by SlB.l | billion to offset effects of inflation. The cuts were aimed at low and middle-in-come people. Instead the House voted 362 to 49 to reduce taxes by $16.3 billion, giving most relief to those earning over ($20,000 annually.

Mr Carter’s 'defeat comes 'at a time when his public- [ opinion-poll popularity is at a low ebb. But he will have another > chance to salvage his plan, I or parts of it, when the Senate considers the bill—- — pieced together by a coalition of conservative Republicans and Democrats. As the House was voting down the Carter plan 225 to 123, sources told NZPA-Reu-ter that the Assistant Trea= sury Secretary (Mr Donald Lubick) was meeting Senator Russell Long, chairman of the powerful Senate Finance Committee, in a last effort

Ito s.lvage part of the pro I gramme.

H The House-passed bill contained a massive $l.B billion tax cut on capital gains that Mr Carter opposed because he said it would benefit mainly the wealthy. To win over some conservative Republicans, the Carter plan included a capi-tal-gains tax cut, but not as attractive as the one approved by the House. The final House version contained income-tax reductions for individuals, businesses, and investors who get capital gains and a new •' tax-reduction scheme for 'home-owners.

■ This plan would give home-owners a unique opportunity to escape all taxes on profits from house sales up to $lOO,OOO once during each owner’s lifetime. It is designed to offset higher taxes on home sales caused by inflated real estate prices. The popularity of President Carter has now dropped ter the point where an estimated 50 per cent of Americans believe he should not seek re-election in 1980, a public-opinion poll has shown.

The poll, carried out by the Associated Press and the N.B.C. television network, shows that only 26 per cent of respondents felt Mr Carter was doing a good job in : the White House — down from 27 per cent in June. It found that 50 per cent lof the 1600 persons quizzed would oppose a Carter candidacy in the next Presidential elections, while 38 per (cent favoured a re-election ibid. 12 per cent had no opinion. • The survey was carried •out on Monday and Tuesday, I before the White House announcement of a Middle-East summit conference to take place outside Washington early next month. In recent months, Mr Carter has said he had not yet decided whether to stand in 1980. Meanw'hile in an interview with the magazine, “Business Week,” Mr Carter attributed the continuing sliding of his popularity [mainly to the difficulty in • getting Congress to approve nis energy plan. ! “Progress had not been rapid enough; I think this is wTiat the polls reflect and it [mirrors my feeling too,” he I said.