Michel: Clinton Can Win on Income Tax

WHEN the Clinton administration's deficit-reduction plan - in whatever final form it takes - passes the Congress, what will the president need to get to say he's achieved something?

House minority leader Robert Michel (R) of Illinois, speaking at a Monitor breakfast yesterday, pointed to the increase in the marginal tax rate. The top income-tax bracket now is 33 percent, but President Clinton wants to raise it. His proposed hike already has been bargained down to 35.5 percent and may go down to 35 percent by the time the bill reaches the House of Representatives floor today.

But with all the fierce debate over the proposed energy tax and efforts to curtail spending on entitlements, some increase in the top tax rate seems likely to go through.

"There's significant revenue coming in there," says Mr. Michel, speaking on the eve of the vote in the House of Representatives. "That's one, rightly or wrongly, that the president was banging away on, and if he wins on part of that, he can say, `Hey, look what I got done.' "

Michel surmises that if the president had kept the highest tax rate at its current level, Mr. Clinton would have had a much easier time in his efforts to raise other taxes.

"If he had said, `I will not raise marginal tax rates! Read my lips!,' he would have been in a heck of a lot better shape, because I always thought that was one of the great things we did in Republican administration: Nobody pays more than a third to government...," the House Republican leader said.

"Then around the edges you could do these other things, or still raise some taxes if you thought you needed them, whether it's the gas tax or something embodied in part of that energy tax. But when you raise marginal rates and start moving the other way, then I'll say, `Lock the door.' "