DATE: Tuesday, April 15, 1997               TAG: 9704150005

SECTION: LOCAL                   PAGE: B10  EDITION: FINAL 

TYPE: Editorial 

                                            LENGTH:   53 lines

REFORM STILL NEEDED ANOTHER YEAR, ANOTHER BROKEN PROMISE.

Every year there are promises from politicians that the annual rite of taxation will be simplified and made less painful. But when April 15 rolls around: no significant change.

The issue is not how much we are taxed. That's a great ongoing debate and should be. Do we need more government or less? What are the necessities for a great nation and what are the unaffordable luxuries or wasteful frills? Those are questions that should be settled in democratic give-and-take.

But on tax day there can't be too much debate over the question of how we are taxed. As President Carter complained 20 years ago, the system is a disgrace. Endless forms couched in gobbledygook require billions to be spent on preparers, accountants and attorneys.

The Internal Revenue Service deserves part of the blame. Its own advice is often wrong. Its attitude is often arrogant. And its record is dismal. Billions down a computer rat hole. Employees who misuse tax information that is supposed to be confidential. Quotas that focus attention on small fry while big fish scofflaws swim away.

But the heart of the matter is a tax code written not to efficiently raise revenues to pay for needed public programs but a tax code written to please constituents - festooned with goodies and giveaways, distorting markets by pandering to special interests.

And in this game, we all have special interests. Seniors want special treatment. Parents want a break. Charities can't live without their handout. That opens the door to the egregious trading of campaign contributions for tax code loopholes. It happens all the time and results in blithering complexity and blatant unfairness. The many breaks for the privileged few have the effect of shifting the tax burden to the hapless many.

The same politicians who created this mess pop up every year at this time to propose miraculous cures, sweeping reforms. They say they'll make the tax flat or replace it with a VAT. They say they'll make it harder for themselves to raise taxes. They say they'll do new favors for old favorites - by eliminating the capital-gains tax, or the estate tax, by giving more breaks to the poor, parents or homeowners.

What they really need to do is less. The tax doesn't have to be flat to be simple. A few progressive brackets and no deductions, exemptions, credits, loopholes or breaks would raise revenue without penalizing the poor or playing favorites. And every individual could calculate his own obligation without having to recruit an army of tax mercenaries.

But it is unlikely to happen because politicians then couldn't offer breaks to fats cats or promise cuts to the rest of us. That suggests - yet again - that campaign-finance reform is the prerequisite for tax reform. And voters should think long and hard about replacing any politician who won't vote for both before the next April 15 rears its ugly head.

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