Tax-cut bill aids wealthy more than advertised Although it provided less of a reduction in the top income-tax rate, it eliminated limits on deductions that can be taken.

WASHINGTON — A little-noticed provision in the tax cut approved by Congress last week gives the wealthy an even bigger tax break than advertised.

The bill won needed support from moderate Democrats only after it was revised to reduce the top federal income-tax rate from 39.6 percent to 35 percent instead of to the 33 percent that President Bush had sought.

But then Congress added a provision to eliminate limits on how much wealthy taxpayers could deduct from their income before calculating their taxes. The effect will be the same as shaving an additional 1.2 percentage points or more off the top rate.

"It's helpful," said Pete Sepp, a spokesman for the National Taxpayers Union, a group that advocates lower taxes.

In fact, a married couple with two children, earning $1 million a year, will get a tax break that is $1,500 larger under the final legislation than they would have received under the original Bush proposal, according to an analysis by the accounting firm of Deloitte & Touche L.L.P.

The size of the tax cut for the wealthy was a major point of contention in the legislative debate.

Congress approved the tax bill Saturday only after several changes were made that partially addressed Democrats' demands that the bill give less to the wealthy and more to the poor.

The final bill does provide more for the poor than the Bush proposal would have offered. But it also provides more to some high-income earners.

CCH Inc., a Riverwoods, Ill., firm that analyzes the effect of changes in tax law for accountants and other clients, described the repeal of the limits on deductions as "a back-door tax cut" for high-bracket taxpayers.

Taxpayers don't need to be in the top bracket to benefit from the repeal, however.

The limits, which will be phased out between 2006 and 2010, begin to kick in for households with $132,950 or more in adjusted gross income, which is income before most deductions.

Tax experts view the limits on deductions as hidden taxes because they increase taxes without changing the rates. Calculating the limits on one's deductions is complicated, and a recent congressional report on tax simplification recommended eliminating them.