ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, January 18, 1996 TAG: 9601180086
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: Associated Press
Hoping to turn tax pique to political advantage, a Republican commission on Wednesday recommended replacing the nation's intricate tax code with a single rate and personal exemptions to shield the poor.
GOP presidential front-runner Bob Dole cautiously welcomed the effort to find a ``fairer, flatter, simpler approach'' but warned that any change must not shift more of the tax burden from the rich to the middle class.
``The middle class always seem to end up with the heaviest load, and they're tired,'' the Senate majority leader said.
In an election year filled with talk of a flat tax, Dole and House Speaker Newt Gingrich called on President Clinton to work with Republicans to scrap the current tax system and start anew.
But Clinton's spokesman was cool to the commission's ideas, saying a flat tax might lead to tax increases for the middle class and swell the budget deficit.
``Sometimes simple ideas can be simple-minded if they are not artfully constructed,'' White House spokesman Mike McCurry said.
The GOP commission, headed by former Housing Secretary Jack Kemp, shied away from endorsing a specific plan or flat rate pushed by any GOP presidential candidate. Instead, it laid out a dozen principles to be followed in changing the tax code.
The panel, heavy with Dole supporters, also sidestepped the issue of whether to eliminate politically popular deductions such as one for mortgage interest. It said the matter should be studied.
Publisher Steve Forbes, who has moved up in GOP presidential polls with heavy advertising for his flat-tax plan, called the Republican group's recommendation encouraging. ``I see it as a step forward,'' Forbes said on ``This Morning'' on CBS.
He offered his own plan as the answer. It calls for a 17 percent flat rate, no deduction for mortgage interest and no individual taxes on interest or capital gains.
But his plan has been ridiculed by GOP rivals as a ``nutty idea'' and a windfall for the rich. Several Republican hopefuls have proposed modified flat-tax proposals that would preserve the deductions for mortgage interest and charitable contributions.
Sen. Phil Gramm of Texas, who unveiled one such plan this week, took an oblique swipe Wednesday at Dole for failing to embrace a specific plan.
``I think if you would be president of the United States you ought to have a program,'' Gramm said in a speech to the Cato Institute, a libertarian think tank. ``You ought to be able to stand up and tell people what you would do and how you would change America.''
Commentator Pat Buchanan, another presidential hopeful who proposes keeping middle-class deductions, seemed more in line with Dole's thinking, writing in Wednesday's New York Times that Republicans should not abandon the middle class.
But Sen. Dick Lugar of Indiana said the Kemp panel fell short because its plan would preserve the Internal Revenue Service. Lugar wants to abolish the income tax entirely and replace it with a national retail sales tax.
``We must make a decisive change in our tax system, not tinker at the edges,'' Lugar said in a statement.
Treasury Secretary Robert Rubin said Clinton supports efforts to simplify the tax system. But Rubin said the GOP commission's plan ``offers no solution to how a flat tax proposal can avoid either raising income taxes on working families or exploding the deficit.''Dole said he would pass the commission's recommendations on to the Senate Finance Committee, or perhaps to a task force, to begin hearings on the issue. He did not address whether the plan should be a plank in the Republican platform to be adopted this summer at the party's convention.
The Kemp commission left many details vague, such as what the single rate of taxation should be or the level of the personal exemption.
LENGTH: Medium: 76 lines ILLUSTRATION: GRAPHIC: Chart by AP: Tax reform. color.by CNB