THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Thursday, April 6, 1995 TAG: 9504060017
SECTION: FRONT PAGE: A10 EDITION: FINAL
TYPE: Editorial
LENGTH: Medium: 57 lines
This is ``tax week'' in the House, the moment when tax cuts contained in the Contract With America come to a vote. But they only tinker with the present tax code. It's widely realized that more thorough overhaul is needed.
Speaker Newt Gingrich and Senate Majority Leader Bob Dole are deluged with proposals for flat taxes, fewer brackets, lower rates and even a replacement of the income tax with a value-added tax or other consumption-based levy.
To winnow all the ideas in search of reform, Dole and Gingrich have announced creation of a commission to which each will appoint four members. They agreed on the choice of former congressman Jack Kemp to chair the effort.
Kemp remains a committed supply-sider who favors lower taxes as a way to spur economic growth. In theory, increased economic activity will generate enough tax revenues to make up for the lower rates. But you don't have to subscribe to the supply-side gospel to feel that tax reform is needed and to regard Kemp as a good choice to lead the effort.
Kemp's energy is legendary, and he is widely regarded as a fair dealer who will put principle ahead of politics and give all participants a hearing. Democrats may not agree with the prescriptions the Republicans will write, but almost no one thinks the present system is rational.
The 1986 reform under President Reagan that streamlined brackets, brought down rates and eliminated many deductions, exemptions and loopholes was a step in the right direction. But Congress has been backsliding ever since, adding new gimmicks and confusion rather than continuing to simplify. Unfortunately, many of the Contract's tax proposals would continue in this dubious direction.
Kemp's goal should be to devise a tax system that gathers needed revenue fairly, without favoring some citizens or penalizing others. The tax code shouldn't require ordinary citizens or business owners to go to great expense and hire cadres of professionals just to comply with its complexities. Social engineering and pandering to special interests ought to have no place in a tax system, and it should be economically neutral rather than tilting the playing field and distorting free markets.
Kemp says he'll aim at having specific proposals ready in time to be a part of a GOP platform for 1996. That gives him about 15 months. It's a good assignment and a reasonable time frame. The Democrats would be well-advised to undertake a similar effort. If Kemp succeeds in devising a simpler, fairer tax code, millions of harried, baffled and angry taxpayers will rally to the cause. ILLUSTRATION: Drawing
JACK KEMP
by CNB