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Republicans Plan Radical Tax Cuts

WASHINGTON -- The new Republican leadership of Congress has vowed to push for an immediate cut in the capital gains tax, and an incoming committee chairman said he plans to explore the possibility of eliminating the federal income tax altogether.


In addition, congressional Republicans plan to enact welfare reform legislation that strips most recipients of benefits after two years with no government safety net -- even if that forces indigent parents to give up their children, said Representative Bill Archer, who is in line to take over as head of the powerful House Ways and Means Committee.


"If we're going to be serious about having a program that requires work, then you've got to be in the position to say: `You lose your welfare benefits and if the children cannot be supported by you they have to be put into foster homes,'"Archer said in an interview.


The Texas conservative was the first Republican committee chairman to begin spelling out details of his legislative priorities in the wake of Tuesday's electoral landslide.


Many of the proposed tax cuts are perennial GOP priorities, including the reduction of taxes paid on capital gains -- the profits from stocks, bonds and other investment assets. But weighing the eventual elimination of the income tax, the primary source of federal revenues, represents a radical departure from mainstream tax policy.


The new Ways and Means chairman said he favored replacing the current system of income taxation in favor of a "national consumption tax," or sales tax, that could serve as an "engine to drive job creation ... and economic activity."


Enforcing a two-year limit on welfare, including food stamps, so strictly that poor families could be forced to place their children in foster homes would be Draconian even by conservative standards.


Some analysts expect the Republicans to moderate their more controversial positions once they take control of Congress. Archer said, on the contrary, their electoral victories if anything will make their positions even "tougher."


"We have a responsibility now to roll up our sleeves ... and deliver," he said.


While it seems improbable that Congress will vote to scrap the federal income tax any time soon, the conservative wave produced by this week's mid-term elections appears to have made some kind of tax reduction almost a certainty next year.


Senior Clinton administration officials conceded Thursday the White House is likely to propose its own broad, middle-class tax cut in an effort to blunt Republican tax-cut initiatives. "I think the chances may be going up that we will do a tax cut," said one senior official who requested anonymity.


Archer and other senior Republicans made it clear the Democrats face wrenching changes inside Congress as well as in policy initiatives, including reductions in committee assignments and staff sizes, as they slip into minority party status after losing control of the House of Representatives for the first time in 40 years.


"We are going to truly change this Congress and the way it operates," he vowed.

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