SENATE Finance Committee Chairman Robert
Dole is leading the good fight to put more fairness into the tax code. The tax bill paid by many people and corporations often depends less on their income than on their tax accountant or lobbyist. Now that the government desperately needs to increase its revenues, Sen. Dole thinks it would be much fairer to eliminate loopholes that let some taxpayers pay little, rather than to increase the burden on those who already pay a lot.
You will not be surprised that the senator is not surrounded by enthusiastic supporters of his reform plans. With elections approaching, congressional resistance to special interests is approaching its biennial low. And it's a good rule that the more outrageous the loophole, the more heavily muscled the lobby that protects it.
Did you expect some restraint on the part of corporate lobbies in return for the enormous benefits they got from last year's tax cut? Corporations are not easily embarrassed. Although many now pay no taxes, their lobbies remain vigorous. Flush defense contractors want to make sure they don't have to pay annual taxes on their realized profits like everyone else. Insurance companies are fighting for their very own $2.3 billion loophole. Big banks, independent oil producers and a host of other little-taxed industries hope to avoid even minimum taxes. Unprofitable companies want to make sure they can still sell their unneeded tax breaks to rich companies desiring to lighten their tax loads.
Many people and businesses have adjusted their dealings to take advantage of tax subsidies, and large abrupt changes could cause a certain amount of economic havoc. That's why it would have been better to use last year's massive tax cuts to persuade people to give up their tax preferences in return for substantially lower rates. Such a trade would serve not only the Treasury but economic efficiency as well.
Without the promise of more fast tax relief, Sen. Dole has nothing to offer in return for tax reform-- except the appeal of fairness and simplicity in the tax code. That may not win him many votes in corporate board rooms, but there is one strong constituency for tax reform: the general public. This Congress, which has been so brave in its assaults on the poor and powerless, has developed an unsavory reputation for responsiveness to well-heeled interests. If Sen. Dole's start at cleaning up the tax code is derailed by his colleagues in the Senate and House, the public may not soon forget who is to blame.