Newspaper article The Christian Science Monitor

Tax-Reform Plans in Limbo until 1996

Newspaper article The Christian Science Monitor

Tax-Reform Plans in Limbo until 1996

Article excerpt

ROBERT MCINTYRE sees himself as almost running a "one-man show" in attacking Republican tax-reform proposals.

The director of Citizens for Tax Justice has written articles for the Washington Post, the New Republic and the American Prospect magazines, and a column for the Scripps-Howard news service criticizing the flat-tax, consumption-tax plans as "flat deceptions" that will hurt the poor and middle class and benefit the rich.

"Once the public focuses on them and understands their meaning, they will reject them," he says.

So far, considering the enormous impact any such dramatic tax changes would have on the pocketbooks of most Americans, the alternative plans have not had all that much attention.

"Nobody has really taken these proposals seriously," says James Carlson, an analyst with Merrill Lynch, Pierce, Fenner & Smith Inc., in New York. "I don't think the public appreciates the degree of intensity behind these proposals."

Authors of the plans are intently serious about trying to implement them. Three conservative plans are the flat tax of Rep. Dick Armey (R) of Texas and Sen. Richard Shelby (R) of Alabama; the Unlimited Savings Allowance (USA) sponsored by Senators Pete Domenici (R) of New Mexico and Sam Nunn (D) of Georgia; and a national retail-sales tax advocated by presidential candidate Sen. Richard Lugar (R) of Indiana.

Last week House Democratic leader Richard Gephardt put forward a more-liberal tax-reform plan in response to the conservative plans. It would eliminate almost all tax deductions or other tax breaks, allowing the income-tax rate for about 75 percent of all taxpayers to be set at 10 percent.

The liberal-leaning Mr. McIntyre calls it a "useful proposal."

None of these tax-reform plans, however, is likely to go anywhere in a hurry. A commission on tax reform, appointed by the Republican congressional leadership and headed by Jack Kemp, an enthusiast for supply-side economics and former secretary of housing and urban development under President Bush, is supposed to report back in October. Its recommendations will presumably be used by Republicans to hammer out a compromise measure. …

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