“Tax reform” is a phrase that means all things to all people, especially in Washington.
To corporations, “tax reform” means lower taxes and special loopholes allegedly to give them more incentive to make money from consumers
To the average taxpayer, “tax reform” means repealing those loopholes and special provisions for the rich and powerful so that the burden falls less heavily on the little guy.
TO PRESIDENT Ford, it is not clear just what it means, except that corporations would pay even less. Some of them, like oil companies and banks, are paying less than 10 percent federal income tax now.
If you are weary of listening year after year to what the powerful intend to do to tax reform, consider what a growing number of ordinary taxpayer reform groups from around the country are preparing to present to their members of Congress.
Working together under an umbrella organization called the National Committee for Tax Justice, these citizen groups have met and drawn up a detailed Tax Justice Act of 1975 soon to be introduced by their representatives in Congress.
This is grass roots citizen action. For example, Bob Loitz, a small businessman in Ohio, came to the conclusion about three years ago that nobody but the people are really going to accomplish tax reform.
So with knowledge and energy, he organized the Ohio Tax Equity for America (TEA) party with offices at 475 West Market Street, Akron, Ohio.
After dozens of meetings, television interviews and many hours of learning about tax injustices, a network of committed citizens has developed in several midwestern states working with Loitz and the Ohio TEA Party.
THE IDEA is to mobilize grass roots organizations and hundreds of thousands of individuals with petitions calling for congressional enactment of the Tax Justice Act.
The act is not a collage of all idealistic reforms but a hardheaded point-by-point focus on specific injustices which have been repeatedly condemned but nevertheless continue for lack of civic power on Congress.
All in all, the proposed act would repeal about $20 billion of tax injustices and redistribute about $13 billion through lower individual taxes to middle and lower income taxpayers.
Heavy attention is given in the proposal to ending massive tax subsidies to corporations such as the investment tax credit and fast depreciation write-offs. Such special tax reliefs are often passed by Congress in return for verbal assurances by industry that it will increase capital investment and employment.
Actually it is worse than buying a pig in a poke, for these assurances are neither enforceable nor even studied effectively by the U.S. Treasury to see if they have any validity prior to passage of the bonanzas.
WHAT THESE TAX subsidies most often do is reward companies for doing what they were going to do anyhow on their way to making sales and profits.
As many of the tax experts consulted by the Committee for Tax Justice have urged, if there is going to be a subsidy, let it be direct and subject to annual congressional appropriations review instead of obtaining it through the backdoor via a tax loophole.
In addition to providing for changes in capital gains taxation and tax-free bonds, the act would substitute credits for non-business deductions.
As a deduction, a $750 personal exemption means far more dollars saved for a wealthy taxpayer in the 60 percent bracket than a taxpayer in the 20 percent bracket. A credit against taxes would avoid such inequities.
What Bob Loitz and others in this movement are trying to say to millions of American workers is simply this:
If you’re working about three months a year to pay federal taxes, then shouldn’t you spend a few days a year as a citizen making sure that you’re taxed fairly and that the government spends your taxes wisely? If you don’t, it will continue to be a very expensive time off from democracy. And the rich will get richer off the U.S. Treasury and you.
TAXPAYERS interested in a copy of the Tax Justice Act and a primer on tax reform can send a self-addressed, stamped envelope to the National Committee for Tax Justice, 1609 Connecticut Ave. NW, Washington D. C. 20009.