Seven...Uh, Six...Signs Of Spring (3/28/97)
May It Please The Court... (3/21/97)
Same Time, Next Year
By Charles Bierbauer/CNN
WASHINGTON (April 17) -- The checks are in the mail. Owed the IRS a bit this year.
Now that April 15 has come and gone dare we comfortably put the terrors of tax day behind us? Not if we're smart. Any tax expert will tell you the time to start next year's tax planning is yesterday.
You can tuck a little away in an IRA. Store some more in a 401-K. Put a little aside in the kids' accounts. Not too much, though, or the IRS will tax theirs just as steeply as yours. And you'll worry the kids might spend it as frivolously as the government. Still, there's only so much you can do to curb your own tax bill.
The real problem with planning for next year's taxes is knowing now what next year's tax law will look like. Is there any real chance Congress and the Clinton Administration might do anything to actually make paying taxes less painful, less complicated, less costly?
You might have thought so listening to the people's representatives on April 15:
"Today is dreaded tax day." -- Rep. Joseph Pitts (R-Pa.)
"Some say it takes a village to raise a child, but it takes a village idiot to raise taxes on working families." -- Rep. Tom DeLay (R-Texas)
"Milk the cow, but don't pull off the udder." -- Rep. Chip Pickering (R-Miss.)
"It's time to take a cue from Lorena Bobbit. It's time to slash." -- Rep. Joel Hefley (R-Colo.)
If only there were a tax on bad rhetoric. We could balance the budget in no time.
So what has Congress actually done to ease our pain and payments? Assuming, of course, you think Americans are overtaxed. We could be paying Swedish rates.
The politicians must think so. President Bill Clinton and the Republican leaders all want tax cuts, though not the same cuts.
Well, here's what all the great symbolism and not-so-great rhetoric produced on tax day. The House voted on three tax-related measures. The Senate voted on one.
Don't hold your breath.
-- A bill to amend the Constitution to require a two-thirds majority of Congress to raise taxes fell short in the House. Just the latest of a spate of constitutional amendments to be rejected, most deservedly.
-- The House passed a sense of Congress vote saying Americans deserve tax relief. It won't actually save anyone a dime. Thanks, guys and gals. Feel better?
-- The House and Senate passed similar bills making it a crime for IRS employees to "browse" through their computers and snoop in our tax files without authorization. This measure actually counts. It's a tool the tax collection agency wanted to curb the curiosity of its employees and allow it to dismiss the nosy ones.
The taxing business still lies ahead if we are to see any significant changes. It's part structural, part fiscal, part philosophical.
Building a Better Bureaucracy
The National Commission on Restructuring the Internal Revenue Service is leaning toward urging a more independent IRS with greater public oversight, perhaps a civilian review board. For some reason, the Clinton administration's Treasury Department has recently warmed toward embracing its wayward stepchild. Some commission members see that as a Johnny-come-lately acceptance of Treasury responsibility and suggest it's too late.
"Take the leadership away from Treasury," says one commission member.
Another suggests there has to be a message to the IRS, too: "Answer the phones, and don't blame everything on the computers!"
The commission, which will issue its report early this summer, is also headed toward reminding Congress that a lot of the IRS problems are driven by the way Congress has written the rules.
What Ever Happened to Tax Reform?
House Majority Leader Dick Armey (R-Texas), is still touting his 17 percent "flat tax" as the way to go. File it on a post card. Make tax day a breeze.
Ways and Means Committee Chairman Bill Archer, also a Texas Republican, still wants to "tear the tax code out by its roots" and uproot the IRS as well. For several years now, Archer has been urging some form of consumption tax, either a national sales tax or a value-added tax of the sort collected in much of Europe. For all his rumination, though, Archer has not yet decided which he likes.
Other proposals bob up from time to time on Capitol Hill, some flatter, some fatter. The Clinton Administration this week proposed some 60 changes in IRS procedures to make filing simpler.
Genuine tax reform, though, is not on this year's calendar.
"It won't happen as long as Clinton is president," says Republican Armey, putting the partisan KO on the subject.
What might happen will take a bipartisan punch.
A Balanced Budget and a Tax Cut, Too!
One of comedian Chevy Chase's old Saturday Night Live routines advertised a wondrous product that was both a "floor wax and a dessert topping!"
Congressional and administration budget negotiators are trying to recreate that stomach-turning combination. Their alchemy counts on balancing the budget while the federal government both takes in less tax revenue and spends less. And all it takes is the correct formula.
Some common ground exists within unequal parameters.
-- Both sides propose a $500 per child tax credit for middle income families. But what's middle income?
-- Democrats have allowed there could be some reduction of capital gains taxes, though not as broadly as Republicans would like. Clinton would expand the exemption for profits on home sales. Republicans want to halve the 28 percent maximum capital gains rate.
-- Republicans want to cut -- ideally, eliminate -- estate taxes.
-- Democrats say there must be movement on education towards Clinton's tuition tax credits.
A balanced budget deal is the best bet for tax relief. At this point, taxpayers, don't count on anything. Nothing is certain until the whole budget package is locked in.
Except, of course, April 15, 1997. Mark your calendars. Same time, next year.
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