Despite Veto Threat, GOP Bill to Cut Taxes Clears House Panel

Ignoring White House veto threats, a powerful congressional committee approved an $864-billion Republican tax bill Wednesday night that would slash income, capital-gains and other taxes for businesses and Americans who invest in the stock market.

The bill, approved 23 to 13 by the Republican-controlled House Ways and Means Committee, would reduce all five income tax rates by 10% across the board over the next decade and cut the top capital-gains tax rate on investment profits for individuals to 15% from 20% effective July 1, 1999.

Companies would also benefit because the bill would cut corporate capital-gains tax rates to 25% from 35%, repeal the alternative minimum tax and provide special tax breaks for research, development and other business expenses.

At $864 billion, it would be the largest and most sweeping tax cut since 1981, when Reagan was president.

But supporters and critics alike say the package has little chance of becoming law, since Democrats and the White House oppose the bill, and Republicans would not have enough votes on their own to override a presidential veto.

“This is merely a piece of campaign literature,” said Rep. Charles B. Rangel of New York, the top Democrat on the Ways and Means Committee. Rep. Gerald D. Kleczka, a Wisconsin Democrat, added: “The bill isn’t going anywhere.”

Those dim prospects have not discouraged House Republicans, who see a big tax-cut bill as a way of distinguishing themselves from “tax-and-spend” Democrats even if it never becomes law. Republicans could also use a presidential veto to rally voters in 2000 against Vice President Al Gore, the Democratic front-runner, strategists say.

The House is expected to vote on the tax bill later this month while the Senate takes up a competing tax-cutting measure.