Tax Reform

With the unveiling of the plan of Sen. Bob Packwood (R-Ore.), we are up to Chapter IV of President Reagan's quest for a tax-reform program that provides Fairness, Growth and Simplicity. Are we making progress in the process? It is doubtful. First there was Treasury I, the plan produced by the Treasury Department at the President's request back in 1984. It had flaws, but it was better than the present system. Then came Treasury II--or Treasury I, as revised by the White House.

The way tax reform is going, some people might be tempted to think that the Big Hype has replaced the Big Lie as the most efficient way to bamboozle the taxpayers out of their wealth. For reasons that apparently remain a mystery to the press and politicians, the ingrates don't seem to be appropriately thankful for the benefits bestowed on them by their public-spirited congressmen who have struggled long and valiantly to reform the oppressive tax code. The biggest benefit, of course, is simplification, by which the tax brackets are reduced from more than a dozen to only two or three.

There's dumb and dumber in the House of Representatives. First, Republicans sponsored reckless legislation to scrap the federal tax code in 2002. Then they actually passed it. Luckily, no one expects the ill-conceived measure to become law this year. This bill has populist appeal--who doesn't think the tax code is ridiculously complex?--but it's based not on solid reform but rather outlandish gimmickry. The House bill would abolish the existing Internal Revenue Code on Dec.

Fair taxes--what an irony! The article you ran on taxes favoring the rich and penalizing the middle class ("Inequality Haunts America as Taxes Favor the Rich, Penalize the Middle Class," by Michael Harrington, Opinion, Jan. 24) was very informative. My family supported the new tax bill thinking we would receive a badly needed tax break. On the contrary, we are now obliged to pay the same amount without all of the previous deductions, however. The upper class, on the other hand, also gets fewer deductions but a large cut in the maximum tax, which creates a decrease in their payments.

Just three months ago, tax reform seemed ready for an embalming. The American public was cynical and apathetic. The prevalant atti tude in the United States Senate was: If the people don't care, why operate once more on a tax code that's had eight major revisions since 1968? Former IRS commissioner Sheldon Cohen put it aptly: "We'll take the devil we know for the devil we don't know every time."

By a 292-136 vote, the House passed and sent to the Senate a historic bill (HR 3838) that radically changes the U.S. tax code. America's new tax system would take full effect in 1988, lowering the top individual tax rate to 28% and the top corporate rate to 34%. The great majority of individuals would owe less in taxes and the typical corporation more, because the bill eliminates a host of breaks that have benefited businesses and wealthy individuals.