THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Saturday, September 16, 1995 TAG: 9509160015
SECTION: FRONT PAGE: A12 EDITION: FINAL
TYPE: Editorial
LENGTH: Medium: 57 lines
The rap on Republican budget reformers hasn't been their desire to cut government spending, but their lopsided priorities. Proposed cuts have seemed designed to hurt the poor and spare the prosperous. The criticism isn't confined to liberals. Even House Budget Committee Chairman John Kasich, R-Ohio, has bemoaned the tilt.
Now, apparently stung by the criticism, House Ways and Means Chairman Bill Archer, R-Tex., offers a package of reforms that would reduce so-called corporate welfare by $30 billion over seven years. According to conservative critics of government handouts, like the libertarian Cato Institute, that's a mere drop in the bucket. They believe corporate welfare accounts for tens, perhaps hundreds, of billions of dollars a year.
Though Archer's reforms barely scratch the surface, they do represent a step in the right direction. He'd shut down several notorious giveaways. A tax advantage for ethanol fuel has long been criticized as an environmental sham and an immense windfall for the chief beneficiary - Archer-Daniels-Midland. The company is, coincidentally, a big campaign contributor to both parties.
Section 936 of the tax code is equally infamous. A tax credit that has encouraged U.S. companies to move jobs to Puerto Rico, it is ripe for instant elimination. Instead, Archer would phase it out over 10 years.
A Clinton proposal to tax rich people who renounce their citizenship to outwit the IRS is back on the table, but it's more symbol than substance. The cases are few and the money involved trivial in comparison to government spending.
Archer is also reviving a reform proposed by his predecessor, Dan Rostenkowski. It would deny movie studios a loophole that lets them compute depreciation in a uniquely advantageous way. Several dozen equally arcane provisions are also targeted. Many have been in the sights before but have escaped unscathed. It could happen again.
Furthermore, all the savings won't go to deficit reduction. Archer wants to retain several tax provisions now scheduled to lapse. Businesses would get a tax credit for research, employers hiring the disadvantaged would get a break, and an increase in the tax on jet fuel would be postponed.
The list of tax reforms proposed by Archer makes it obvious that the critics are right. Eliminating a few special-interest provisions adding up to $4 billion a year is progress, but more serious pruning could save billions more.
The tax code is, to borrow from Hamlet, ``an unweeded garden that grows to seed, things rank and gross in nature possess it merely.'' A massive uprooting of tangled provisions is needed. The present system lets favored industries and individuals escape taxation, shifts the burden to the average taxpayer and contributes to deficits that strangle the economy. Instead of pulling a few weeds, it is time to alter the landscape. by CNB