Rostenkowski Vows to Keep Tax Breaks for Middle-Income Payers

WASHINGTON — House negotiators will fight to preserve tax deductions for middle-income Americans, including write-offs for individual retirement accounts, Rep. Dan Rostenkowski (D-Ill.), chairman of the Ways and Means Committee, said Saturday.

“Reform means that the average middle-income American will have his tax bill reduced because the once-protected special interests are required to join the legions of taxpayers,” said Rostenkowski, who delivered the Democratic response to President Reagan’s radio address.

“Rewriting the tax code could provide a lion’s share of relief to the rich,” Rostenkowski said. “That’s a mistake we don’t want to make.”

Major Differences in Bills

The House and Senate bills would curtail deductions in return for lower rates, but there are major differences. The House bill has four individual tax rates of 15%, 25%, 35% and 38%. The Senate measure has two rates, 15% and 27%, and would more severely limit tax breaks, including ones for sales taxes and contributions to individual retirement accounts.

The House bill would keep deductions for IRAs and sales taxes.

The House measure also would, in five years, raise business taxes by about $140 billion, while the Senate measure would increase corporate taxes by $100 billion.

As Low as Possible

The conferees will try to keep the rates as low as possible, Rostenkowski said, adding:

“We’ll also be working to preserve benefits that millions of ordinary Americans depend upon. That means the home mortgage interest deduction, the sales tax deduction and IRA provisions that help guarantee that people will have adequate retirement income.”

Rostenkowski later said, as he suggested in a speech last month, that he might be willing to accept the lower individual tax rates of the Senate-passed bill if Senate bargainers would go along with the heftier corporate taxes in the House-passed measure.