ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, April 3, 1996 TAG: 9604030039
SECTION: VIRGINIA PAGE: C1 EDITION: METRO
SOURCE: DWAYNE YANCEY STAFF WRITER
TAX TIME IS HERE, and the four major candidates for U.S. Senate have some ideas on how to change what you pay.
Think the flat tax is a great idea? Then Jim Miller is your guy. He's the only one of Virginia's four major candidates for the U.S. Senate who unequivocally backs a flat tax. The former Reagan administration budget director is convinced it would rejuvenate the economy.
Want to junk income taxes altogether and go with a European-style consumption tax? Then try U.S. Sen. John Warner. The three-term Republican is the only one of the four who is willing to consider the idea, because he thinks it might encourage Americans to save more money.
How about making college tuition tax-deductible? If you like that idea, then the Democrats are your ticket: Both Alexandria telecommunication entrepreneur Mark Warner and former Rep. Leslie Byrne of Falls Church support making all or most college tuition payments tax-deductible.
Finally, which should be the nation's economic priority - cutting the deficit or cutting taxes? John Warner and the two Democrats stand together, saying balancing the budget should come first. Miller disagrees, saying the deficit is a problem but that tax cuts are more important.
When The Roanoke Times asked readers several weeks ago for the questions they would like to put to the Senate candidates, economic questions - more specifically, taxes and a balanced budget - topped the list.
And when the candidates answered those questions, their responses spotlighted some key differences among the four main hopefuls for the parties' nomination.
Miller, co-chairman of a Washington think tank called The Tax Foundation, is the most likely to break from the pack - supporting the flat tax; insisting that taxes can be cut while still balancing the federal budget; opposing tax deductions for home mortgage interest, charitable contributions and college tuition.
John Warner is the most likely to seek a middle ground - saying he backs a "flatter" tax system, although stopping short of saying he backs a flat tax outright, and offering a different approach to college tuition.
Meanwhile, the two Democrats appeared virtually indistinguishable on the tax issues, although Byrne's rhetoric was a bit sharper.
Virginia's 1996 Senate elections are nearer than you may think:
Democrats will hold mass meetings across the state April 13 and 15 to select delegates to the state nominating convention in June. For practical purposes, though, those mid-April caucuses should effectively decide whether Byrne or Mark Warner is the nominee.
So far, that campaign has focused largely on multimillionaire Mark Warner's declaration that he won't accept contributions from political action committees, and Byrne's contention that she would do a better job of representing working-class Virginians.
Republicans will pick their nominee in a June 11 primary that pits Miller against John Warner in a contest highlighted mostly by charges from some GOP activists that the incumbent is a "traitor" to the party because he refused to back nominee Oliver North in the 1994 U.S. Senate race.
Residents who contacted the newspaper, however, were more concerned about their pocketbooks. Here's what the candidates say about the issues residents were raising:
``The flat tax - why is it good for average Americans, or why isn't it? All I hear from politicians is it's good or it's bad.'' - Donald R. Hill, Roanoke County
All four candidates say the nation's tax system needs to be simplified.
But the two Democrats say a flat tax would be a bad deal. "Under the flat tax, 70 percent of Americans would pay more taxes," Byrne insists. She and Mark Warner both contend that eliminating the home mortgage interest deduction would undermine the housing market and make it harder for "average Virginians" to buy a home. Byrne also worries that eliminating the deduction for charitable contributions would hurt charities.
To some extent, John Warner agrees. He says the nation needs a "flatter" tax system and says he's "confident that more Americans will pay less to the federal government under a flat tax plan." But he warns that "the devil is in the details." He, too, says that any overhaul of the nation's tax system "must protect the home mortgage interest deduction and the deduction for charitable contributions."
Miller disagrees. He would eliminate those deductions as part of a flat tax. "The flat tax would not harm the housing market," he says. Instead, he argues the flat tax would lower interest rates, which would be good for home buyers. Likewise, "any reduction in giving because of eliminating the deduction for charitable contributions would be more than offset by the positive effects of giving because of higher incomes."
``We should not be taxed on our income. Let's go to a national consumption tax and eliminate income taxes. Then, people who are not paying taxes on their incomes will pay taxes.'' - Peggy Long, Roanoke
The two Democrats say replacing income taxes with consumption taxes would be a bad idea because sales taxes tend to take a bigger bite out of the wallets of lower-income taxpayers.
Miller offers other reasons to oppose consumption taxes: They're unwieldy to administer, and the only sure way to eliminate income taxes would be to repeal the 16th Amendment to the Constitution.
John Warner, however, is open to the idea. "The strength of a consumption tax is that it encourages savings," he said. "As Congress considers tax reform, all tax proposals, including a consumption tax, should be on the table. Plans that encourage saving should receive considerable weight, and I believe they will."
``As a parent of two college graduates and one college senior, one of the issues facing our country today is college tuition. We have managed to put our children through college by saving ahead a little bit, but it is never enough. The amount of college tuition, I think, should be tax-deductible.'' - Judy Henderson, Roanoke County
The two Democrats say this would be a good idea. Byrne seems to back making tuition completely deductible. Mark Warner cites President Clinton's plan to allow a $5,000 deduction that would grow to $10,000 in 1999, calling it a balanced approach between making college more affordable and balancing the budget. This, he says, is "a modest step in the right direction."
On the Republican side, John Warner doesn't address the idea of making tuition tax-deductible. Instead, he points to his support for a tax-free educational savings account, similar to IRAs. Miller, meanwhile, opposes making tuition tax-deductible - under the flat tax, there are no deductions. He also says "it would be unfair to those who do not pay college tuitions to have to pay more in taxes so that tuition-payers could pay less. The major advantages of a college education accrue to the student; indeed, getting a college education usually raises a person's lifetime income by several hundred thousand dollars."
``I would like to see them balance the budget but don't cut taxes till the budget is balanced. I just don't want to load my grandkids up with a load of debt. I'd like to see the candidates address this problem.'' - Howard Cox, Roanoke
Perhaps the fundamental divide on economic policy is which should come first, balancing the budget or cutting taxes. The two Democrats and John Warner, to varying degrees, all say that balancing the budget should be the top priority. John Warner notes that the Republican tax plan, vetoed by Clinton, would have both balanced the budget within seven years and provided a "solid middle-class tax cut. So it can be done. But I do agree that the balanced-budget plan must be in place before tax reductions."
Miller disagrees. "One can defend tax cuts in the face of a deficit quite straight-forwardly," he says. Tax cuts actually increase revenues flowing into the federal treasury, he contends, because tax cuts give taxpayers more purchasing power - which, in turn, generates taxes. He also contends that his research shows tax rates have little to do with the deficit. Instead, the key, he says, is controlling government spending. Miller also wants to eliminate inheritance taxes.
Have a question for the candidates for U.S. Senate or House of Representatives? Let us know so we can follow up. Write to The Citizens' Agenda, in care of The Roanoke Times, P.O. Box 2491, Roanoke 24010; or e-mail dyancey@infi.net; or fax 981-3346.
LENGTH: Long : 149 lines ILLUSTRATION: GRAPHIC: chart - Where the Senate Candidates Stand: On Taxesby CNBWant to see more? Some of the candidates provided detailed
explanations of their positions. For the candidates' complete
answers, go on-line and check out The Roanoke Times' Campaign '96
home page on the Internet: http://www.infi.net/roatimes/ KEYWORDS: POLITICS CONGRESS