Reagan’s tax bill passed

Press, 6 August 1981, Page 8

Reagan’s tax bill passed

NZPA-Reuter Washington

The American Congress yesterday completed action bn President Reagan's historic economic programme as the House of Representatives passed his three-year. 25 per cent tax-cut bill. It now goes back to the White House for Mr Reagan’s formal signature. The measure, approved on a 282-95 vote, will cut individual and business taxes by a record $906 million by 1986. Congress earlier passed Mr Reagan’s plan to chop $43.6 billion from Government social programmes next year, ranging from school lunches to health programmes.

The Senate approved the bill on Tuesday. Its centrepiece is a 25 per cent individual income-tax reduction that will be phased in over a three-year period.

Liberal Democrats in the House! yesterday unsuccessfully tried to sidetrack the measure at the last minute through a parliamentary move as a symbolic protest against, the bill’s tax reductioris for the oil industry. With yesterday’s vote, Mr Reagan’s econoraic . pro-

gramme will have completed its passage through Congress in seven months, against rugged Democratic opposition.

In that time, he has started slowing a rising tide of Government spending on social programmes which dated back to the great depression of the 19305. His advisers say the tax cuts are part of a plan to hold down Government spending by keeping funds in private hands and away from Congress, .which they 'said would spend the money. The tax-cut bill will reduce income-tax rates, which now range from 14 per cent of. taxable income for lowincome people to 70 per cent for the richest. Both reductions amount to 5 per cent and start on October 1.

Further 10 per cent reductions become effective in: July, next year and 1983. Next year the top rate will drop to 50 per cent from 70, The personal tax cuts will start taking effect in payrolls'. in the first week of October, but for the average worker with three dependants making about $24,200 a year the . reduction will be hardly noticed — less than $1 a week.