Gop Commission Backs Tax Overhaul New Tax Code Would Carry Single Rate, But Contain Personal Exemptions For Poor
Hoping to turn tax pique to political advantage, a Republican commission on Wednesday recommended replacing the nation’s intricate tax code with a single rate and personal exemptions to shield the poor.
GOP presidential front-runner Bob Dole cautiously welcomed the effort to find a “fairer, flatter, simpler approach,” but warned that any change must not shift more of the tax burden from the rich to the middle class.
“The middle class always seem to end up with the heaviest load, and they’re tired,” said Dole.
In an election year filled with talk of a flat tax, Dole and House Speaker Newt Gingrich called on President Clinton to work with Republicans to junk the current tax system and start anew.
But Clinton’s spokesman was cool to the commission’s ideas, saying a flat tax might lead to tax increases for the middle class and swell the budget deficit.
“Sometimes simple ideas can be simple-minded if they are not artfully constructed,” said White House spokesman Mike McCurry.
The GOP commission, headed by former Housing Secretary Jack Kemp, shied away from endorsing a specific plan or flat rate pushed by any GOP presidential candidate. Instead, it laid out a dozen principles that should be followed.
The panel, heavy with Dole supporters, also sidestepped the issue of whether to eliminate politically popular deductions such as one for mortgage interest. It said the matter should be studied.
Publisher Steve Forbes, who has moved up in GOP presidential polls with heavy advertising for his flat-tax plan, called the Republican group’s recommendation encouraging.
“I see it as a step forward,” Forbes said on CBS’s “This Morning.”
He offered his own plan as the answer. It calls for a 17 percent flat rate, no deduction for mortgage interest and no individual taxes on interest or capital gains.
Dole seemed worried Democrats could seize on the plan to argue Republicans are abandoning the middle class - a key swing group of voters either party needs to win.
“We all agree that we don’t shift the burden from the upper income to the middle income,” Dole said, stressing the importance of the mortgage interest deduction to homeowners.
Forbes’ plan has been ridiculed by his GOP rivals as a “nutty idea” and a windfall for the rich. Several Republican hopefuls have proposed modified flat-tax proposals that would preserve the deductions for mortgage interest and charitable contributions.
The Kemp commission, appointed by Dole and Gingrich, left many details vague, such as what the single rate of taxation should be or the level of the personal exemption.