Tax Legislation? Wait till Next Year

October 22, 1992

In keeping with the political fun and games always played with tax legislation, Democrats are in the process of deciding whether to embarrass President Bush by forcing him to pocket-veto a Christmas-tree bill passed on the last day of Congress or to delay in hopes he will sign it just after election day. We favor a veto.

No tears need be shed for Mr. Bush because he is in this trap. It is very much of his own making. The voluminous measure, passed in the House in the wee hours as it rushed to adjournment, contains several measures the Republican incumbent advocated, including tax concessions to those who invest in 50 low-income enterprise zones and tax breaks for certain industries and special groups that could give the economy a boost.

Because the measure contains revenue increases to offset revenue losses, the White House has tentatively signaled a veto is in the making. And why? For all the wrong reasons. Mr. Bush has said he will "never, ever ever" approve any tax increases. Since any tax bill contains winners and losers, Mr. Bush's logic is just plain unworkable.

Democratic presidential candidate Bill Clinton, still smarting over Mr. Bush's charges that as governor of Arkansas he has put in 128 so-called tax increases, did his bit to force a veto. He said it would be "inconsistent" for the president to approve a federal measure with similar upward revenue adjustments in fees and taxes since the president had condemned him for doing the same.

No great harm would come if the pending bill is allowed to die, despite the lobbying of special interests hammering for approval. While the legislation contains many desirable features, it was put together in such a feverish political atmosphere that the end product is suspect. Close attention should be paid to the words of Rep. Leon Panetta, chairman of the House Budget Committee, who broke with his Democratic leadership to oppose the measure on the ground it is a "budget-buster." Mr. Panetta warned the popular middle-income liberalization of Individual Retirement Account provisions could end up boosting the deficit $11 billion a year after a half-decade introductory period.

It would be far better if changes in the tax code and urban initiatives such as enterprise zones were included in the economic program that the next president presents to the new Congress early in 1993. Legislation then could be shaped without having the Washington political establishment transfixed by election calculations.

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