While families and investors await word on how big a tax cut they will get from Congress and President Bush, millions should be watching instead to see how much their taxes are going to rise.
Bush's budget, with its proposals for a reduction in capital-gains taxes, an increased exemption for children and a new credit for some home buyers, would be financed in part by tax increases exceeding $21-billion over the next five years.
Among the targets: state and local government employees; boaters; pay-phone users; securities dealers; and buyers of certain life insurance policies.
A Democratic plan to give a temporary credit of up to $200 a year to wage-earners would be financed by higher taxes on couples with incomes in the $200,000-plus range ($100,000 for singles) and a new surtax on millionaires.
The House Ways and Means Committee will begin deciding today what kind of tax-cut plan is called for and how it should be financed.
One of the early battles may come over which version of the Bush proposal the committee should consider: the original 49-item measure or a stripped-down version.
The latter is backed by the House Republican leadership with the concurrence of the administration. It would include only the president's seven main pro-growth proposals plus other changes, largely of a bookkeeping nature, to offset the revenue loss from the growth package.
The pro-growth items include the reduction in the tax on capital gains, plus tax breaks for the depressed real estate industry, for first-time home-buyers and for business investment in new equipment.
Democrats on the House Ways and Means Committee are confident they can prevail against Bush's original proposal or the stripped-down version. But their main interest in today's session will be in forcing votes that dramatize their party's emphasis on helping the middle class, compared to the approach taken by the Republicans.
Once they have done that, the Democrats will retreat behind closed doors, for what is expected to be several days, to work out the details of their own bill. It is expected to incorporate a number of the areas covered by the original Bush program.
Among Bush's proposals and their five-year costs:
Two-million state and local government employees who had their jobs before April 1, 1986, would be required to pay the 1.45 percent tax that finances Medicare hospital insurance. Workers hired since then already pay the tax. All but about 300,000 of the 2-million already are covered by Medicare because of previous employment or their spouse's coverage. Cost: More than $8-billion, which employers would match.
An estimated 100,000 operators of diesel-powered recreational boats would begin paying the 20.1-cent-a-gallon tax on diesel fuel. Cost: $200-million.
Nearly 1,000 credit unions with assets more than $50-million would be subject to income tax. Cost: Up to $2-billion.
Local calls on coin-operated phones would be subject to the 3 percent telephone tax. Cost: $500-million.
Many brokers would be required to change their method of valuing securities held for sale to customers. Cost: $4-billion.
Corporations would lose the ability to deduct interest paid on loans secured by the cash value of life insurance on key employees. Cost: at least $2.5-billion.
_ Staff writer Eileen Shanahan contributed to this report.