
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, March 16, 1995                   TAG: 9503160050
SECTION: EDITORIAL                    PAGE: A-10   EDITION: METRO 
SOURCE: 
DATELINE:                                 LENGTH: Medium

HERE COMES MORE TAX-CUT HOOEY

CONGRESSMAN L. F. Payne of Virginia's 5th District hit it on the nose. With the federal government's yearly debt-service costs averaging $3,100 per family of four, said Payne, a Democratic member of the House Ways and Means Committee, the best relief you could offer is not an irresponsible tax cut but long-term deficit reduction.

The committee, as expected, ignored Payne. On a 21-14 party-line vote, it this week approved a tax-cut bill that will cost the treasury nearly $200 billion over the next five years, and $630 billion over the next decade.

It's a tax-cut package guaranteed to please - if, that is, you like the prospect of erecting a new roadblock to deficit reduction, granting new tax breaks to the wealthy, and expanding the army of lawyers and accountants engaged in the tax-avoidance industry.

On the deficit-reduction front, the bill's effect is to raise the ante for any effort to reduce federal debt as a portion of the U.S. economy. As for bringing the budget into anything approaching balance: Tax-cut proponents say they have the $200 billion in spending cuts to offset the impact of the proposed tax relief. But a balanced budget by the year 2002, as promised by House Republicans, would require coming up with $1.2 trillion in spending cuts between now and then - before you get to anything to offset new tax cuts.

Then there's the question of fairness. "If you are a hard-working, overburdened American family," said Ways and Means Chairman Bill Archer of the tax-cut package, "relief is on the way." That's certainly true if you're an overburdened American family making $200,000 or more annually. But the unburdening of those in the middle- and lower-income categories would be considerably more modest.

It's not just a matter of the affluent having bigger tax bills to begin with. The percentage reduction in their tax bills would also be greater.

According to figures from the Joint Committee on Taxation, families whose incomes are between, say, $30,000 and $40,000 would by the year 2000 pay 4.8 percent less than now. Families whose incomes are between $100,000 and $200,000 would pay 6.2 percent less; families whose incomes are more than $200,000 would pay 7.3 percent less.

Finally, the package represents the most broad-based attack to date on the tax-simplicity principles enacted in 1986 at the Reagan administration's initiative. Instead of general adjustments in tax rates, the 1995 package would put the federal government more intrusively into the business of singling out certain kinds of individual income for special tax favors, and certain kinds of personal spending for special tax preferences.

This would be bad legislation even if it weren't slanted toward the wealthy, which it is, and even if it were affordable right now for the country, which it isn't.

by CNB