MOWING DOWN phalanxes of tax lobbyists and lawyers, Finance Committee Chairman Robert Dole has pushed his tax bill through to passage in the Senate, a signal achievement described in our Topic A feature today. Action now moves to the House, where Democrats--by seeking to avoid any blame for a tax increase--are cutting themselves out of any share of the well-deserved credit for the first significant move toward tax reform in decades.
Not all Democrats are so self-destructive. Several Democratic senators gave Sen. Dole needed support on key amendments to the Senate bill--although none supported its final passage. In the House, Ways and Means Committee Chairman Dan Rostenkowski has been trying to develop a bipartisan bill. But he hasn't mustered sufficient support thus far in his committee--where Democrats outnumber Republicans by almost 2 to 1--and Mr. Rostenkowski may now pursue the novel strategy of going straight to conference on the Senate bill.
In terms of the public interest, it wouldn't be a bad thing at all if the House were simply to rubberstamp the Senate bill. But there are provisions in that bill--the too-generous treatment of capital gains and the sharp cutback on deductible medical expenses for average taxpayers--that one would expect Democrats to want to correct. Instead, they are pursuing the strategy of labeling the bill as a Republican "tax increase" that Democrats wouldn't touch with a 10-foot pole in an election year.
That's not likely to sell well with voters. Few provisions in the Dole bill affect the average taxpayer, and these small excise tax increases are unlikely to be noticed by the consumer as he pays his monthly telephone bill or buys a pack of cigarettes. The Democrats are right that last year's tax cuts were too big. But why roll back tax cuts for the average taxpayer--as Democrats seem to prefer-- rather than go after businesses and individuals who avoid paying their fair share of the tax burden?
The big bulk of the revenue savings that Sen. Dole proposes, after all, comes from tax reforms that Democrats have long talked about. How can they oppose scaling back the inordinately generous depreciation deductions and leasing loopholes that, in future years, would turn the tax code into a giant negative income tax for corporations? What interests can possibly be served by protecting tax cheats who conceal interest and dividend income? Surely not some concern for discouraging savings, since the impact on honest taxpayers would be minimal. And how can Democrats of the party's liberal wing in particular vote against curbing taxpayer financing for the proverbial three-martini lunch? Since when did they become defenders of upper-bracket privilege and abuse?
If the Democrats still feel that the 1983 tax cut is too large, they will have ample opportunity in next year's budget debate to do something about it. Perhaps they will want to go Sen. Dole one better by taking on some of the enormous tax shelters that still lurk within the tax code. But sidestepping the Dole reforms would leave Democrats in a very weak position to claim any leadership in the long overdue battle to make the tax system cleaner and fairer.