Chicago-Area IRS Workers Suspended
CHICAGO (AP) - At least eight Internal Revenue Service employees have been suspended during an investigation into whether IRS workers took bribes in exchange for helping taxpayers with such things as halting collection actions and providing transcripts of accounts, according to published reports.
The New York Times reported Saturday that Charlie Turek, president of the National Treasury Employees Union local in Chicago, and lawyers familiar with the case expect a federal grand jury to hand down indictments.
The paper said the workers, who are employed at four Chicago offices, were suspended with pay three weeks ago and were told they would be fired.
A message left at the union was not immediately returned Saturday. Turek does not have a home telephone listing.
Early editions of Sunday's Chicago Sun-Times cited unidentified sources close to the investigation as saying that tape recordings caught at least two employees allegedly accepting payoffs.
The Sun-Times, citing sources, reported that the employees include a customer-service representative who allegedly accepted payments of up to $50 to give preferential treatment to taxpayers or to provide transcripts of proceedings in a taxpayer's account. Confidential transcript information could enable a creditor to file a claim for someone else's refund or for a lawyer or accountant to solicit a delinquent taxpayer for business.
David C. Williams, the inspector general, declined comment to the Times on the investigation. IRS spokesman William Rivkin would neither confirm nor deny the investigation to the Sun-Times.
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AUGUST 02, 22:43 EDT
GOP Is Still Pushing Tax Cuts
By CURT ANDERSON
Associated Press Writer
PHILADELPHIA (AP) — A farmer, a single mom, small-business owners and a few politicians lined up Wednesday at the Republican National Convention to press key GOP economic goals ranging from tax cuts to creation of personal investment accounts to supplement Social Security.
Hector Barreto, owner of a Los Angeles employee benefits firm, said if elected George W. Bush would "break the iron grip of litigation, taxation and regulation to help mom-and-pop stores, manufacturers, high-tech start-ups and family farms."
Elimination of inheritance or "death" taxes, easing the tax penalty on marriage, reducing government regulation, welfare reform and fair trade were themes of speakers, many chosen for their "real people" appeal. All are central to the GOP agenda, but they were largely crowded out of prime convention time slots by other priorities such as improving education and attracting minority voters.
"It's a different pitch now," said former Rep. Bob Livingston of Louisiana. "The same principles, but a different pitch. It's not as shrill."
Still, Ohio Rep. John Kasich told delegates tax relief is "a real moral issue" that empowers people by limiting the influence of government in their lives.
"Every time we cut taxes, we make government less important and people across this great country more important," said Kasich, the House Budget Committee chairman who briefly ran for the GOP presidential nomination last year.
"Tax cuts give us the power and the resources to fix the problems we all face every day in our own families and within our communities," he added.
Kim Jennings, a single mother from Rogers, Ark., said Bush's plan to reduce income tax rates would put $1,000 more in her pocket.
"Politicians in Washington forget this money is not the government's. It is money that I earned and worked for," she said.
A bill to eliminate the marriage tax penalty sits on President Clinton's desk awaiting a veto. The inheritance tax repeal passed by Congress will meet a similar fate. In both cases, Clinton and Vice President Al Gore say the cuts are too deep and mainly help the wealthiest Americans.
Senate Majority Trent Lott, R-Miss., criticized Gore's tie-breaking vote for a 1993 budget deal that raised taxes on gasoline and made estate taxes retroactive.
"He proudly calls this the best vote he has ever cast. Is it any wonder Americans don't want this vice president to be their next president?" Lott told the delegates, who loudly yelled "Yes!" when he ticked off the list of tax cuts Congress has passed.
Democrats say the convention's relative quiet about tax cuts is part of a GOP effort to avoid frightening people who are concerned the cuts could eat up a projected budget surplus before it even arrives, siphoning off money from crucial government programs.
"They don't want to say anything at all," said Democratic National Committee Chairman Joe Andrew. "America rightly sees the Democrats as the party of fiscal discipline."
Virginia Gov. Jim Gilmore said Democratic charges of draining the surplus is "the old way of the old Democrats. They try to set one priority against the other and force you to make decisions."
Bush has proposed major tax cuts that would total roughly $1 trillion over the next decade and they are a staple of most Republican congressional campaigns. Although cutting taxes may not play as well for a national election, the issue still energizes the GOP base and could be a deciding factor in some districts.
"We've been overtaxed for two or three years," said Mike Weber, a GOP delegate from Reno, Nev. "There are whole piles of money and the first thing the Democrats want to do with it is spend it."
Gore also proposes cutting taxes, but his plans are targeted more toward middle-class people for specific purposes such as the costs of caring for an elderly relative.
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AUGUST 04, 21:00 EDT
Clinton To Veto Marriage Tax Cut
By ALAN FRAM
Associated Press Writer
WASHINGTON (AP) — President Clinton will use his weekly radio address on Saturday to announce that he has vetoed one of congressional Republicans' top legislative priorities, a $292 billion, 10-year tax cut for married couples, an informed Democrat said Friday.
Clinton's action comes as no surprise since he had promised to kill the measure even before the Senate gave final congressional approval to the legislation on July 21.
Yet coming two days after Republicans concluded their national convention by nominating Texas Gov. George W. Bush for president, the veto highlights Democrats' hopes of quickly stemming the momentum the GOP built for itself during its four-day gathering in Philadelphia.
At a campaign rally Friday in Akron, Ohio, Bush ridiculed Clinton's decision to veto the bill. "What kind of a tax code is it that discourages marriage?" he said.
Clinton's plans were described by a Democrat who spoke on condition of anonymity.
When they pushed the measure through Congress — with support from some Democrats — Republicans trumpeted it as eliminating the so-called marriage penalty. That is the popular name for the extra taxes 25 million couples must pay because they are married due to a structural quirk in the tax code.
But the bill would also cut taxes for about as many additional couples who now enjoy a marriage "bonus," paying less than they would pay if single. This largely affects families in which one spouse earns most of the family income.
Most of the bill's tax reductions come from enlarging the bottom 15 percent tax bracket and increasing the standard tax deduction for couples filing jointly.
Republicans argued that the measure would benefit millions of middle- class Americans while using just a small portion of the projected $2.2 trillion, 10-year federal surplus. The figure excludes even larger projected Social Security surpluses.
In his acceptance speech Thursday night, Bush said cutting taxes would be one of his priorities, but he did not specifically mention the marriage penalty.
But as part of the $1.3 trillion in tax cuts over 10 years that he has proposed in recent months, Bush has said he would "greatly reduce" the marriage penalty with a 10 percent deduction for two-earner couples of up to an additional $3,000.
Gene Sperling, Clinton's national economic adviser, said Republican tax cuts would cause deficits.
"The Republicans clearly believe America is mathematically challenged," Sperling said Friday. "But the simple math is when you add up tax cuts they're proposing this year with those being proposed in the campaign, they're over $2 trillion, leaving nothing for Medicare, nothing for Social Security, and putting America back in deficit."
"The president is not going to let that happen," he said.
Clinton and most Democrats have said the cuts in couples' taxes that Congress has passed would be enjoyed disproportionately by families in the top 1 percent income range. They have also said the bill's cost to the Treasury — and that of other GOP tax cuts — would consume a budget surplus that could be used better for trimming the national debt and providing a Medicare prescription drug benefit.
The Senate approved the measure by 60-34 on July 21 with the support of seven Democrats. A day earlier, the House passed it by 271-156, with 51 Democrats voting "yes."
In both cases, the bill was supported by less than the two-thirds majorities needed to override a presidential veto.
Many Republicans believe that Clinton's veto gives them a winning political issue by demonstrating that with a GOP-controlled Congress, a Democratic president is the only obstacle to sweeping tax reductions.
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AUGUST 05, 19:06 EDT
Clinton Vetoes GOP Marriage Tax Cut
By ANNE GEARAN
Associated Press Writer
EDGARTOWN, Mass. (AP) — President Clinton vetoed a Republican-sponsored tax cut for married couples Saturday, describing it as "the first installment of a fiscally reckless tax strategy" that would erase projected budget surpluses.
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He said the tax break package amounted to little more than a gift to the wealthy.
The legislation passed both the House and the Senate by less than the two-thirds majorities needed to override Clinton's veto, but a House leader said an override attempt will be a top priority after Congress' current summer recess.
GOP presidential nominee George W. Bush, on a campaign train tour through the Midwest with running mate Dick Cheney, criticized the veto. The legislation, Bush said at a rally in Pontiac, Mich., "was the right thing to do. What kind of tax code is it that penalize marriage. It's a bad tax code."
Vice President Al Gore, the presumptive Democratic presidential nominee, said he agreed with the veto but would sign a different tax cut for married couples.
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"I'm for repealing the marriage tax, but not going beyond working families and not giving tax relief to people who are in the upper brackets and people who are not even married who are benefited by the version that was passed," said Gore, speaking from Westhampton, N.Y. "So I do support the veto. I also support the right kind of repeal of the marriage tax."
Clinton vetoed the $292 billion, 10-year tax cut before his morning round of golf on the Massachusetts resort island of Martha's Vineyard, where the first family is vacationing this weekend.
He returned the legislation to Congress with a letter in which he said the tax plan was regressive.
"It provides little relief to families that need it most, while devoting a large fraction of its benefits to families with higher incomes," Clinton's letter said.
The veto, which Clinton announced on his weekly radio address, is the opening salvo of a complicated political skirmish as the November presidential election looms. Clinton and the Democrats are trying to offer their own tax cut package while arguing that Republicans are giving away the store.
Many Republicans believe Clinton's veto gives them a winning political issue by demonstrating that with a GOP-controlled Congress, a Democratic president is the only obstacle to sweeping tax reductions.
The bill's Senate author, Sen. Kay Bailey Hutchison, R-Texas, gave an indication of what is to come with a statement that said Clinton chose a quiet Saturday morning for the veto because he thought American's wouldn't notice.
"But working families are paying attention, and they know the president has run out of excuses," Hutchison said. "The Republicans have just nominated a presidential candidate who will give marriage penalty relief to working families."
Rep. Tom DeLay, also of Texas, the third-ranking Republican in the House, has said that upon its return from recess next month, the House will make trying to override the veto its "first order of business."
The White House claims that tax cuts supported by GOP leaders in Congress, when combined with the tax cut package proposed by Bush, would cost more than $2 trillion over 10 years. Bush said Saturday he would have signed the bill.
Estimates of the non-Social Security budget surplus range from $1.5 trillion to $2.2 trillion over 10 years.
Clinton accuses Republicans of using his success to justify election- year tax break gimmicks they know he will veto.
"I support tax cuts, but tax cuts we can afford. We can't afford a $2 trillion U-turn on the path of fiscal discipline and economic progress," Clinton said in the radio address.
The marriage penalty legislation and other tax cuts approved by the tax-writing House Ways and Means Committee this year "provide about as much benefit to the top 1 percent of Americans as to the bottom 80 percent combined," Clinton's letter to Congress said.
The wealthiest 1 percent of families get an average tax break of more than $16,000, while a middle-class family gets an average break of $220, Clinton claimed.
Ways and Means Chairman Rep. Bill Archer, R-Texas, turned tables on Clinton and accused him of playing election-year politics.
"Married couples are the latest victims of vetoes, and it's becoming sadly clear that President Clinton cares more about the fortune of political pals on election day than working families on tax day," Archer said Saturday.
The marriage penalty is the popular name for extra taxes 25 million two-wage-earner couples must pay because of a structural quirk in the tax code.
The bill Clinton vetoed also would have cut taxes for about as many additional couples who now enjoy a marriage "bonus" by paying less than they would if they were single. This largely affects families in which one spouse earns most of the family income.
Most of the bill's tax reductions would have come from enlarging the bottom 15 percent tax bracket and increasing the standard tax deduction for couples filing jointly.
Clinton's veto, his 32nd, is no surprise. He promised to kill the measure even before it passed last month.
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