THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Thursday, September 22, 1994 TAG: 9409220516
SECTION: LOCAL PAGE: B3 EDITION: FINAL
SOURCE: BY ROBERT LITTLE, STAFF WRITER
DATELINE: CHESAPEAKE LENGTH: Medium: 71 lines
Republican congressional candidate George Sweet thinks he can cure the 1040 blues.
His solution: Scrap the federal taxation system altogether.
The 4th District challenger endorsed a proposal for a flat, 17 percent income tax rate Wednesday, saying it would lower most people's tax bills and eliminate the federal government's web of forms, schedules and tables.
Yes, it's basically the same plan former California Gov. Jerry Brown pitched when he ran for president two years ago - but now it's been introduced in the House, and it has a lot of Republican tweaks.
Limits would be placed on federal spending, and many agencies and programs - including the IRS - would face the ax.
Taxes on interest, inheritances and capital gains would be eliminated, along with exemptions for things like home ownership. And no more weekly withholding - taxpayers would pay every month, just like many other bills.
The result would be tax cuts for almost everyone and a tax form the size of a postcard, promised Sweet, who is challenging Democrat Norman Sisisky for his seat in the House of Representatives. And the annual federal deficit would be gone within 10 years, Sweet said.
So how much would the federal government save with the flat tax rate?
``We believe it's almost a wash,'' said Sweet, whose aides described Wednesday's endorsement as a key element of the Baptist minister's campaign. ``When the numbers are crunched, you find that you're receiving about the same amount.''
Not exactly.
Rep. Dick Armey, a Dallas Republican who crafted the proposal, contends federal revenue would drop by between $20 billion and $40 billion the first year. The liberal group Citizens for Tax Justice estimates closer to $320 billion, though Armey disputes the group's arithmetic.
Either way, because the 17 percent rate would come after three years - it would be at 20 percent the first two - subsequent federal revenue reductions would be even greater.
Proponents say the drop in tax revenue could be made up with government cuts and layoffs; critics say it would surely swell the budget deficit.
The proposal calls for personal exemptions of $13,100 for single taxpayers; $17,200 for single heads of household; $26,200 for married couples filing jointly; and $5,300 for each dependent. That means many ``working poor'' families could be taken off the tax rolls.
Also, federal programs that cannot pass a review by Congress every 10 years would be eliminated, except for ``earned'' entitlements such as Social Security, Medicare and veterans' benefits.
``Ideas like these prove that the Republican party is more than just the loyal opposition,'' Sweet said. ``We're a party of bold, new, pro-family ideas.''
But critics say the proposal means little more than tax cuts for the wealthiest taxpayers, and less spending for poor, sick and elderly people.
The flat-tax proposal is not a new one, said Sisisky, a congressman since 1982. It is before Congress under the modest title Freedom and Fairness Restoration Act and is not expected to be considered until next year.
``These things come along every once in a while,'' Sisisky said, adding that he has not taken a position on the idea.
``If the proposal really simplifies the tax system, I'd certainly be there for it. But my concern is the deficit. The devil's always in the details. Until the committees get involved and you know what impact it will have, how can you tell?''
KEYWORDS: ELECTION VIRGINIA HOUSE OF DELEGATES RACE
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