A year ago the way to get a good laugh in Washington was to predict that a Senate-House conference committee would be meeting on July 17 to put the finishing touches on the tax-reform act of 1986. But that is exactly what is happening today. Tax reform is a certainty now. That is welcome news for millions of American taxpayers weary of reading about millionaires and huge corporations getting by without paying any taxes at all.
The 22 senators and representatives have some controversial decisions ahead of them. But the major parameters of the tax-reform bill are established. There is informal agreement on a two-bracket system for individuals, 15% and 27%. Both Senate and House bills achieve the important goal of eliminating federal taxes altogether for an estimated 6 million Americans who live below or near the poverty line.
The conference committee needs to agree on an adequate minimum tax for the wealthy and for corporations. That is the only way to persuade the average American that the rich will not be able to find new loopholes to use to their advantage.
And the committee must also be certain that middle-income Americans, who pay for the bulk of trillion-dollar annual federal budgets, are treated fairly in the way the new system redistributes the national tax burden. Where possible, the committee should seek ways to encourage savings and investment and to lessen the tax incentives for credit-card living. Consumer debt has risen to imprudent levels in recent years.