Ask anyone who's been watching congressional tax writing efforts over the past several years, and you'll find a blunt truth about tax "reform": Congress moves slowly - and painfully - in changing the structure of the federal income tax system.
The law makers' first big effort to close off tax "loopholes" that benefit high-income taxpayers came in 1969 - after years of cajoling by would-be reformers. There also were some changes in the so-called "Tax Reform Act" of 1976.
Now, however, the legislators seem to be out to show that tax "reform" not only is difficult to come by, but is fragile as well - with no firm guarantee that a loophole-tightening that is enacted in one year will survive for very long.
While President Carter still is trying to push through the tax revision package he proposed in January, Congress appears headed toward undoing some of the key "reforms" in the 1969 and 1976 acts. And indictations are it just may succeed.
There are these developments:
A 1976 provision that for the first time would raise taxes on heirs who sell large inheritances for profit has been sidetracked abruptly by the Senate Finance Committee - paying the way for its ultimate repeal.The proposal had been the major "reform" in the 1976 act.
Although all sides agreed the 1976 law required some technical adjustments, the Finance Committee voted to postpone the legislation for three years - virtually inviting its shelving for good. The rollback comes up for a floor vote sometime this month.
Another section of the 1976 act that would have tightened the tax treatment of American citizens living abroad already has been postponed twice, and now appears likely to be diluted substantially. Tax breaks for Americans living overseas were criticized as "loopholes" in 1976.
Most analysts had agreed that the 1976 law probably was too harsh on the construction industry, whose overseas employes often are hit by extraordinary living costs. But the law makers seem likely to go well beyond that. Some of the new "compromises" actually would enlarge the pre-1976 break.
A key 1969 provision that tightened the tax treatment of capital gains - profits from the sale of stocks or other assets - faces the threat of virtual repeal this month or next by the House Ways and Means Committee.
The rollback attempt, sponsored by Rep. William Steiger (R-Wis), not only would reduce capital gains tax rates to those that prevailed before the 1969 change, but also would exempt capital gains from the minimum tax - a major factor preventing investors from escaping all taxes.
It's not certain that the Steiger amendment will pass. However, last week, before the Ways and Means Committee suspended work on President Carter's tax package, the provision was considered likely to be approved. Its adoption could peril the whole Carter tax plan.
A 1976 "reform" that required owners of large farms to adopt the standard accrual accounting method - which, in effect, would reduce their already substantial tax breaks -was diluted last week by the Ways and Means panel.
The committee first rejected a Carter administration proposal that would have tightened those procedures ever further. Then it voted to reduce the number of large farms that must adhere to the requirement. The change is considered likely to survive a second round of votes.
Admittedly, some of these earlier "reforms" - particularly those enacted in the pell-mell session of 1976 - needed some fine-tuning. The 1976 provisions were part of a massive tax revision bill. Technical errors ran higher than usual.
But the changes needed to correct any inadvertent errors were far more modest than what Congress now seems to be bent on doing - and far less costly to the Treasury as well.
For example, a new Treasury proposal to adjust the 1976 provision involving taxes on sales of inheritances would result in the "loss" of only $175 million. By contrast, the Senate Finance Committee's rollback effort could cost up to $1 billion if the 1976 law is repealed.
If the Steiger amendment involving capital gains is enacted, it would cost the Treasury a hefty $2.7 billon. Together, the four provisions Congress is postponing or repealing would drain several billion dollars in revenues over a period of years - and add to the budget deficit.
To many onlookers, it may seem a bit puzzling that the law makers seem bent on undoing the "tax reforms" they enacted in 1969 and 1976 - particularly when the provisions were so hardfought at the time they were passed.
While there may not be much break popular pressure for closing off tax "loopholes" this year, polisters haven't detected much widespread support for creating new ones, either - at least, not those that would benefit only a handful of high-income taxpayers.
Treasury figures show the bulk of the tax breaks from these changes would go to a minority of high-income taxpayers, not to the middle class. Of the $2.7 billion in tax breaks involved in the Steiger bill, for example, 69 percent would go to persons earning $106.000 or more.
What is apparent, however, is that the law makers are under some very heavy pressure from high-income taxpayers, who often are influential as well as rich. The Finance Committee's move to postpone the provision raising taxes on heirs' sales stemmed from American Bar Association lobbying.
The other provisions have similar baking.
All of this seems to suggest that the present tax system - an imperfect hodgepodge of compromises and tradeoffs - seems here to stay. The trend has been that Congress gives low-income and middle-income taxpayers tax relief by reducing general tax rates. Wealthy persons get their breaks by maintaining "loopholes."
Congress may upset that balance for a while through tax "reform" legislation, as it did in 1969 and 1976. But as this year's congressional action shows, in cases where it counts, that won't last for long.