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Conscience and the taxpayer

America's growing army of tax evaders may be thinking twice in the wake of last year's legislation to improve the means of enforcement. But the threat of punishment can never replace individual and corporate conscience in what remains ''a system of taxation by confession,'' as a judge called it three decades ago. The violation of conscience, the failure to pay one's legal share, cannot be condoned at any time; it becomes particularly cruel when times are hard for so many of one's fellow citizens.

Yet the recession has become part of the excuse for some tax evaders who fail to report legal income from cash transactions in the so-called underground economy. This economy has been estimated to reach between $200 billion and $430 billion a year. The high figure would represent 14 percent of the gross national product. (The low would represent a lower percentage than in various other countries: Britain, 7.5 percent; West Germany and France, 10 percent; Japan, 15 percent; Israel, 30 percent.)

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Last year Americans' estimated unpaid taxes of $95 billion just about equaled the federal deficit. Imagine what budgets balanced through collected taxes rather than increased tax rates could do for a troubled economy.

To be sure, the US has always had some tax cheaters while maintaining a reputation for high compliance in the international spectrum. But the cost of tax fraud has gone up steadily in recent years, tripling since the less than $30 billion of a decade ago.

No wonder Congress felt compelled to give the Internal Revenue Service more enforcement tools last year. No wonder the press is dramatizing the issue now as tax time approaches.

The need for a restoration of tax conscience may be illustrated by looking back to the campaign against tax evaders during a previous period of hard times almost half a century ago. President Roosevelt castigated those who put the whole burden of enforcement on the government, who suggested they had a ''perfect right'' to evade any taxes ''as long as I can get away with it.'' Senator Vandenberg, no friend of tax evasion of course, said he wished there was the same enthusiasm in Congress for stopping loopholes in expendituresm. He noted that collecting all the income of the tax dodgers would still leave the nation ''sunk in a tragic deficit.''

Stopping loopholes in expenditures as well as taxes is still necessary. But what would Vandenberg think of an increase in tax dodging to last year's point of theoretically eliminating the deficit if all the taxes were paid?

No less challenging than the figures are the demoralized citizen attitudes being found by pollsters. In a national survey for Time magazine, more than a quarter of those questioned found it acceptable not to report cash payments as income; more than 40 percent felt the same about bartering goods and services. Not surprisingly more than 35 percent thought cheating on income taxes is becoming more common.

One answer, as repeatedly mentioned in these pages, is thoroughgoing tax reform to simplify the paying of taxes and reduce the multiplicity of opportunities for mistakes or misrepresentations. But improvements in the system can go only so far. The conscience of Americans will always have to take it the rest of the way.

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