Last fall, after nearly two years of struggle had yielded an overhaul of the income-tax code, House Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.) hung a "Gone Fishing" sign on the door of the panel's meeting room.
The tax system would be left to rest for a while, he said, and businesses and individuals could make their financial plans assured that the tax laws were stable.
Last week, the sign came down. One year -- less a week -- after President Reagan signed the new tax code, both Ways and Means and the Senate Finance Committee approved bills that would raise taxes about $12 billion in fiscal 1988 to help reduce the federal deficit.
Some new taxes were excise or payroll levies, but a sizable portion of the revenue raised in each bill would come from changes in the income-tax code. Some provisions would alter portions of the tax code created last year, such as new limits on the deductibility of interest on home-equity loans.
In a few cases, industries that negotiated favorable compromises in 1986 were cut back hard this time around. Defense contractors and manufacturers that sell their goods on credit were the principal victims.
"If there is any single complaint that business people have, it's lack of stability," said Sen. Bob Packwood (R-Ore.), who was Finance Committee chairman last year and opposed this year's bill. "We sort of bonded ourselves in blood last year to say, this is it. No tinkering other than technical. Now a year later, here we go."
Rostenkowski and Finance Committee Chairman Lloyd Bentsen (D-Tex.) said repeatedly during the week of private meetings that the spirit of tax revision was not being violated, pointing out that tax rates for individuals and businesses would not rise. And Sen. Bill Bradley (D-N.J.), a strong supporter of last year's law, said Congress never committed itself not to further curb abuses and loopholes.
"That only shows you there's a lot of fat still in the tax code," Bradley said in explaining how the two committees had assembled their tax packages so quickly -- less than two weeks for Ways and Means, one week for Finance. In each case, Democrats assembled the packages and then approved them over Republican objections.
Other tax writers speculated that raising $12 billion in revenue had been relatively painless because of Reagan's promise to veto either committee's bill. Passage of either bill, to be coupled with spending cuts on the floor, is not assured in either house.
But in time-honored style, the chairmen of the two tax committees also generated rapid support for their respective plans by doling out rewards to legislators who supported the bill. By tax standards, the dozens of special benefits included in the tax bills are not very costly -- $2.3 billion in the House, about $200 million in the Senate -- but they are plentiful. And for each provision there is a lobby that will press for passage in the full House and Senate.
If the tax bills do not pass:
About 20 million investors in mutual funds would pay taxes on some operating expenses of those funds. Individuals who pay taxes on an estimated basis would have to pay 90 percent of their ultimate bills rather than 80 percent this year.
High-tech companies would lose a hard-fought compromise over how to deduct their research expenses, and some private aircraft manufacturers would lose the benefit of the investment tax credit for 1986 if the bill dies. Accountants and other professionals would have to keep their books on a calendar-year basis, rather than retaining the fiscal-year method they prefer.
Favorable depreciation treatment for citrus groves, inserted at the request of Sen. Lawton Chiles (D-Fla.), would not become law. Cruise ships that ply the Hawaiian islands would not be exempt from a harbor tax, contrary to the wishes of Sen. Spark M. Matsunaga (D-Hawaii). Oil companies would continue paying the windfall-profits tax, to the disappointment of Sens. Bentsen and David L. Boren (D-Okla.).
Not all these provisions are in the House and Senate bills, but many found their way into both measures.