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Minimum Corporate Tax Will Pass, O’Neill Predicts

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Associated Press

Speaker Thomas P. (Tip) O’Neill Jr. predicted today that the Democratic-controlled House will approve a call for a minimum tax on corporations when it debates a 1986 budget later this week that calls for $56 billion in spending cuts.

“I think the minimum tax would pass,” the Speaker said after Democrats met privately for more than two hours to debate the proposal, but he added that another proposal to freeze Social Security benefits for one year will fail when it comes to a vote.

The House is expected to begin debating the budget on Wednesday, and while many Democrats favor attaching a provision calling for a minimum tax on corporations, others say such a provision would complicate efforts to pass overall tax reform legislation later this year.

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House Democratic leader Jim Wright of Texas is a key proponent of the idea, as is Rep. Richard A. Gephardt, the Missouri lawmaker who heads the caucus and who is a strong advocate of tax reform. Rep. Dan Rostenkowski (D-Ill.), the chairman of the tax-writing House Ways and Means Committee, favors delaying action on any tax matters until President Reagan submits his overall tax reform bill.

Democrats held their private, morning caucus as House Republican leader Robert H. Michel indicated he will seek a vote on a non-binding amendment that could call for a minimum tax on both individuals and corporations.

Unlike some Democrats, however, Michel proposed using the revenue to provide tax relief to taxpayers, and not to reduce the deficit--an approach that would satisfy the demand of some lawmakers for a minimum tax while still maintaining a squeeze on federal spending.

The internal Democratic wrangling unfolded in the House as Senate Majority Leader Bob Dole--in a surprising switch--on Monday seemed to invite passage of a minimum corporate tax amendment to the House budget. (Story on Page 10.)

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