WASHINGTON -- The House easily passed a landmark tax reform bill Thursday, moving the nation a giant step closer to a new tax code that would have fewer breaks, lower rates and would touch the pocketbooks of almost all Americans.
The sweeping overhaul of the country's convoluted tax laws -- touted by sponsors as 'the great equalizer between income classes' -- was approved 292-136 and sent to the Senate.
Senate Republican leader Robert Dole of Kansas said he would attempt to begin action on the measure Friday.
A total of 176 Democrats and 116 Republicans voted for the bill while 74 Democrats and 62 Republicans opposed it.
President Reagan, who has made the issue a top priority and fought hard for revising the tax code when the idea seemed dead time and again during the past two years, welcomed the vote and urgedthe Senate to follow suit.
A White House statement boasted the country was 'one step away' from a new tax code that would promote 'fairness and equity and, most important of all, reduce rates for most Americans.'
In addition to limiting deductions and cutting tax rates to their lowest level in about a half-century, the compromise legislation would take about 6 million working poor off the tax rolls and, in the next five years, raise taxes on businesses by about $120 billion while lowering taxes on individuals by a similar amount.
Sponsors argued that by curbing tax breaks and instituting a strong minimum tax for the wealthy and corporations, the bill would finally bring equity to a tax code that has become top heavy with loopholes and has allowed too many people and businesses to avoid paying their fair share.
The most emotional moment of the more than three-hour debate came when retiring House Speaker Thomas O'Neill, D-Mass., made a rare floor speech in favor of the bill, calling it 'the decision of a political lifetime' and a chance to accomplish something that had escaped Congress for years.
'We have struggled too long to waver now. We have accomplished too much to give up now. We have struggled too long to fail now,' O'Neill said. 'Let's say yes to a change. Let's say yes to a brighter new day for American taxpayers. Let's not wait another 50 years for reform.'
O'Neill's remarks drew a standing ovation, including from Treasury Secretary James Baker, who watched the debate from the visitors' gallery.
But opponents contended the bill, drafted in haste last month by House and Senate negotiators, was far from fair, would do little to simplify the tax system and could harm the economy. While the measure would cut taxes for most people rich and poor, it would boost levies for about 15 million lower- and middle-income Americans, the foes argued.
Rep. Tommy Robinson, D-Ark., complained the original tax reform bill was 'an eagle,' but had turned first into a 'turkey' and now into a 'buzzard.'
'It is not pro-growth, not pro-family,' Robinson said. 'This bill is going to wreck our economy.'
Several opponents also complained that, in an effort to win needed support, sponsors loaded the bill with about $11 billion in special tax breaks for lawmakers' favorite projects and companies.
But Rep. Dan Rostenkowski, D-Ill., an architect of the massive legislation, said it was a 'response to a moment in history' when the nation demanded fairness and equity in the tax code.
'It is not the hope of more tax cuts that stirred a doubting nation,' Rostenkowski said, stressing people wanted to make sure others 'can't beat the system any longer.'
Rostenkowski, chairman of the tax-writing Ways and Means Committee, called the measure 'the great equalizer between income classes.'
'Today brings us close to the end of a 22-month struggle for a reform of the United States tax code,' added Rep. John Duncan of Tennessee, ranking Republican on the Ways and Means panel.
Rep. Guy Vander Jagt, R-Mich., agreed with opponents that there were probably '100 reasons to vote against the bill and only a handful to vote for it.' But, he stressed, those few reasons 'were so outstanding, so historic, that they dwarf into insignificance' the others.
Opponents of the plan noted there has been no great public clamor for the bill -- a view suported by public opinion polls -- and many people fear it is not fair. Its backers, acknowledging the bill is not perfect, said it was a major improvement over the current system.
'There is bothgood and bad in this bill,' said Rep. Bill Archer, R-Texas, a prominent opponent. 'The risk associated with the bad outweighs the good.'
Under the bill, the present 15 individual tax rates, which have a top of 50 percent, would be replaced by two stated rates of 15 percent and 28 percent and an effective top rate of 33 percent. The top corporate rate of 46 percent would drop to 34 percent.
However, to pay for those reductions, the bill limits or drops a host of tax breaks, including some popular middle-class items.
For example, the deduction for contributions to individual retirement accounts is severely limited, the deduction for sales taxes is dropped, the write-off for two-earner couples is eliminated and new restrictions are placed on deductions for things such as medical expenses and union dues.
But some of the most popular deductions, such as those for home mortgage interest and most state and local taxes, would be preserved.
