Reagan Council Sees Tax Plan Hiking Family Income by $600

The tax-overhaul plan approved by the Senate Finance Committee would boost the average American family’s after-tax income by more than $600 a year while adding 4 million jobs to the U.S. economy over the next decade, the Reagan Administration said Tuesday.

Economic growth would be increased by 10% a year over the next 10 years, according to an analysis of the tax bill by the President’s Council of Economic Advisers.

‘Strongly Pro-Growth’

“It is our opinion that the committee bill is strongly pro-growth and pro-opportunity,” said a senior Administration official who briefed reporters on the condition that he not be identified.

The official said the council’s preliminary analysis of the bill showed that it equaled the beneficial economic effects that had been expected from President Reagan’s original tax-overhaul plan.

The committee bill, which is scheduled for debate by the full Senate in early June, would produce an average individual tax cut of 6.2% and would remove an estimated 6 million working poor from the tax rolls entirely.

The committee’s proposal slashes the top individual tax rate of 50% by almost half, to 27%.

Rise in GNP Seen

The council’s review projected that annual growth rates for the gross national product would be 10% higher each year over the next decade if the committee bill becomes law. Thus, the 4% growth rate projected by the Administration for 1987 would become a 4.4% growth figure if this forecast turns out to be true.

The analysis said that the average family’s after-tax income would rise by between $600 and $900 each year over the next 10 years.

The lower individual tax rates would be financed by eliminating a number of deductions used by both individuals and businesses.