Reagan tries to clear the air on taxes
As it prepares for next week's Republican National Convention in Dallas and the reelection battle that follows, the Reagan administration is trying to dispel a cloud of confusion over its tax policy.
A tax increase after the November election to help reduce the federal deficit would be acceptable only as a ''last resort'' - after spending had been cut as much as possible, President Reagan said in a statement released Sunday. He ruled out an increase in personal income taxes.
Treasury Secretary Donald T. Regan said separately that as a result of a tax-reform study now under way at Treasury, it is ''entirely possible that someone would pay more but others will pay less.'' Mr. Regan also said Sunday, ''You have to rule out'' a sales tax as an option for changing the tax code, despite the fact such a plan is under study at Treasury. A national sales tax should be avoided because it would be neither fair nor simple, Regan said on ABC-TV's ''This Week with David Brinkley.''
The debate on taxes was spurred by Walter Mondale's statement at the Democratic convention last month that he would have to boost taxes to cope with the federal deficit and that Mr. Reagan would as well. Mr. Mondale alleged that the President has a ''secret plan'' to hike taxes.
After the latest Reagan policy twist, a Mondale spokesman said the President had been ''smoked out'' on the issue and now should spell out his plans in detail. ''He has left the door open for regressive taxes, taxes that will hit the average American hardest and leave Reagan's rich friends alone,'' the spokesman, Dayton Duncan, said.
The President's decision to leave himself some room to maneuver on taxes came amid controversy within the GOP over how firm a prohibition on tax increases should be included in the party's 1984 platform in response to Mondale's use of the tax issue.
Sen. Bob Kasten (R) of Wisconsin, chairman of the platform's economic subcommittee, said Monday, ''We are not anxious to leave wriggle room in terms of increases in taxes.''
He added that circumstances, like war, could make a tax hike necessary. ''I am not saying anyone should ever say never,'' he said.
The Platform Committee chairman, Rep. Trent Lott of Mississippi, said Sunday it was his personal view that ''there will not be any qualifying language'' in the platform that would modify a unequivocal rejection of tax hikes. Conservatives like Representative Lott and Rep. Jack Kemp New York oppose any tax increases, while more moderate party members like Sen. Robert Dole of Kansas say the President needs to keep his revenue-raising options open.
In an interview with the Washington Post former Transportation Secretary Drew Lewis, a presidential trouble-shooter, said Reagan is prepared to ''repudiate the Republican platform'' if it goes beyond his latest statement on taxes. On Monday, Mr. Lewis said that if needs are insurmountable ''we don't want to lock the President into a position where he has nowhere to go whatsoever.''
The President's latest statement on taxes appears to be a return to the position on revenue increases he staked out at his July 25 press conference.
At that time he said ''I have no plans for a tax increase.'' But he added that if spending cuts did not bring the budget into balance, ''then you would have to look at the tax structure in order to bring that up to meet the minimum level of government expenditures.''
Since then, the President and other administration officials have made a number of stronger statements, with one last Wednesday by Mr. Regan apparently ruling out tax hikes as far into the future as 1988.
The confusion seemed greatest last Monday when the President told reporters, ''We have no plans for a tax increase nor will I allow any plans for a tax increase. Period.''
But after eating lunch with the President that same day, Vice-President George Bush held a press conference at which he said any president ''would keep options open'' on tax increases.