THERE ARE so many bad things to say about the military tax bill the House is expected to consider today that it's hard to know where to start. So perhaps we should begin with the fact that the underlying measure ought to have been passed a year ago. It would fix some inequities in the tax code by making death payments for military survivors tax-free, extending tax deadlines for service members deployed in potential military actions, and making it easier for service members transferred away from home to avoid paying capital gains taxes on house sales. It would also let members of the National Guard and military reserves deduct travel expenses when they attend training far from home; currently, only taxpayers who itemize (that is, those who are better off) can deduct those costs. All of this would have been done already but for a dispute between the House and Senate over how to pay for it: The Senate wanted to foot the bill by cracking down on Americans who renounce their citizenship and move overseas to avoid paying taxes, but House Ways and Means Chairman Bill Thomas (R-Calif.) balked at this approach.
Mr. Thomas then brought up a new version in his committee last week that would cap the travel expense deduction at $500. That limit doesn't begin to cover the costs borne by many of the 900,000 guardsmen and reservists who attend training one weekend each month and two weeks out of the year. And the ceiling is particularly galling because Mr. Thomas's committee is about to begin considering a dividend tax break, benefiting mostly rich investors, with no dollar limit. The advantage of Mr. Thomas's bill is that it would cost a lot less: $189 million over 10 years, compared with $851 million for unlimited deductions. But these are costs borne by people serving their country. At a time when more than 168,000 reservists have been called for potentially dangerous wartime duty, providing a little more help seems appropriate.
Which brings us to the final, and most outrageous, aspect of this legislation: the array of special interest provisions tacked on in committee. As The Post's Juliet Eilperin reported yesterday, Mr. Thomas invited his Republican members to come on down with tax breaks costing less than $100 million. Not surprisingly, they took him up on his offer: The final package contains about as much in special interest tax breaks as it does for members of the military. It includes help for makers of bows and arrows, fishing tackle boxes and alternative forms of diesel fuel. Foreigners who bet on American horse races would be exempted from paying tax on their winnings. Some of these provisions may have merit -- but not when the country has already incurred a record deficit, is about to start a war and faces expensive new demands to provide for homeland security. Not when Congress is about to begin considering a tax package estimated to cost $726 billion. House Budget Committee Chairman Jim Nussle (R-Iowa) urged his colleagues to hold off. They didn't, but the House has a chance to do the right thing today. It should reject the committee's bill and adopt a Senate version instead.