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Budget Chief Recycles Items From Tax Plan : Revenue-Raising Options Greeted Warily on Hill

October 02, 1987|ANNE SWARDSON | The Washington Post

WASHINGTON — Budget director James C. Miller III has told the chairmen of the House and Senate tax-writing committees that as they search for new taxes, they should consider some leftover revenue-raising items from President Reagan's tax overhaul plan, even though Reagan says he is ardently opposed to more taxes.

During private meetings with the tax-writing chairmen--arranged at his request--Miller offered a list of income tax increases that includes limiting the tax exemption for employee health insurance premiums paid by companies and repealing the deduction for personal property taxes.

In a telephone interview Wednesday, Miller did not say what was on the list he submitted to House Ways and Means Committee Chairman Dan Rostenkowski (D-Ill.) and Senate Finance Committee Chairman Lloyd M. Bentsen (D-Tex.). But congressional sources said it also included repeal of the percentage-depletion deduction for oil producers, trimming the deduction for business meals to 75% or 50% from the current 80%, ending the tax exemption for credit unions and taxing the increase in value of life insurance policies.

Miller, director of the Office of Management and Budget, also has made less specific suggestions along the same lines publicly. On Tuesday, he told reporters that some items originally proposed as part of the Administration's tax-revision plan could be used to raise new revenue.

Controversial Items

Miller said Wednesday that he was only bringing up items for discussion, not advocating any revenue measures beyond the $6 billion or so included in Reagan's budget for 1988 and did not promise that Reagan would accept anything other than his own budget items, none of which affect the income tax code.

"But on the other hand, I think it would be worthwhile to try to pursue some possibility that would avoid a sequester (automatic spending cuts), a goal I think everyone shares," Miller said. "There may well be options that are generically the same as, or close enough to, the kinds of revenues the president has in the 1988 budget that he would accept them."

Revisiting Proposals

Nearly all of the items on Miller's list were controversial during the tax-revision debate, and one congressional source said there was a feeling that Miller showed "incredible naivete" in mentioning them.

Asked about Miller's recent statements, a spokesman for the Treasury Department said, "We would prefer to agree with the president, who said just Wednesday anybody who wants to raise taxes is 'nuts.' "

Bentsen said Wednesday that he would "very definitely" bring before his committee some of the unadopted elements in Reagan's tax-revision plan.

The first Senate drafting session is scheduled for next week. Rostenkowski, whose committee's tax work began Thursday, has also expressed interest in revisiting some of Reagan's proposals.

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