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Tax Cut Attached to Tobacco Bill

June 10, 1998

WASHINGTON (AP) _ With the tacit approval of the White House, Republicans muscled an election-year tax cut through the Senate on Wednesday night, attaching a break for lower- and moderate-income couples to legislation designed to reduce teen smoking.

The provision designed to lessen the impact of the so-called ``marriage penalty″ was adopted by voice vote, but only after Democrats failed, 50-48, in an effort to derail it.

The GOP amendment, crafted by Sen. Phil Gramm, R-Texas, would offer a tax break for all couples earning less than $50,000 a year. In addition, it would allow all self-employed individuals to deduct the full cost of their health insurance from their income taxes, effective immediately.

Gramm cast his proposal as a ``rebate″ for the low-income Americans who would be hit hardest by the tobacco legislation, with its $1.10-a-pack increase in the price of cigarettes.

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