It's a simple law of mathematics: The longer the line at the Post Office on April 15, the shorter the fuse of the hapless taxpayer trying to get that last-minute postmark. That frustration isn't lost on Washington. As frustration with government peaks this time of year, almost everyone in Congress starts talking like a tax-cutter. But not all of the myriad tax cuts floating around Capitol Hill are created equal. Here's a look at a few of the proposals, in roughly descending order of generosity to the greatest number of taxpayers.
- The prize for the most aggressive tax-cut proposal goes to Rep. Vito Fossella (R-N.Y.), who would slash rates by 30 percent across the board. Presidential candidate Dan Quayle has also proposed a 30 percent cut, so the idea could eventually win a little publicity-but that's about all.
- Rep. John Kasich (R-Ohio) proposes a more modest-but still fiercely debated-10 percent cut for all taxpayers. His position as chairman of the House Budget Committee ensures that his bill will receive a serious look.
- Reps. David McIntosh (R-Ind.) and Jerry Weller (R-Ill.) have again introduced a bill that would roll back the higher tax rates paid by married couples. While almost everyone agrees it is unfair to tax married couples at a higher rate than single filers, GOP congressional leaders seem to prefer a broad-based tax cut rather than one targeted to specific groups of taxpayers.
- Seniors who choose to continue working while receiving Social Security will no longer suffer a tax penalty if H.R. 5 passes, as expected. President Clinton indicated recently that he supports Republican efforts to allow older Americans to hold down jobs that supplement their Social Security checks.
- Rep. Chris Cox (R-Calif.) has attracted bipartisan support for his bill to kill the so-called death tax. Although relatively few individuals may be worth $700,000 when they die-the current level at which the death tax kicks in-many small businesses exceed that value. Unable to pay the tax, children often are forced to liquidate the businesses their parents struggled for years to build. Along with all the tax-cut proposals, some in Congress are floating bills aimed at more fundamental tax reform. These may not result in a better bottom line on next year's Form 1040, but they could have more radical and long-reaching effects. Among the proposals:
- The Tax Limitation Amendment, sponsored by three Republicans and two Democrats, would require a two-thirds supermajority in both houses of Congress before implementing any future tax increases. Fourteen states currently have similar laws.
- Rep. Dick Armey's flat tax bill (H.R. 1040) would replace the current, Byzantine tax code with a flat rate of 17 percent for both businesses and individuals. Tax preparation would be radically simpler; no one would need an accountant; and, Mr. Armey insists, most people would end up paying less. His Web site, www.freedom.gov, features an interactive calculator that allows taxpayers to plug in the figures from their current returns to see how they'd fare under the new system.
- The national sales tax (H.R. 2001), most actively supported by Rep. Billy Tauzin (R-La.), would scrap the income tax entirely for both individuals and businesses-along with the inheritance tax and the capital-gains tax. Instead of taxing income, Washington would tax goods and services at a flat rate of 15 percent.
- On the 86th anniversary of the introduction of the modern federal income tax, Rep. Steve Largent (R-Okla.) introduced a bill to "86" the current tax code in its entirety. His Date Certain Tax Code Replacement Act would sunset the current laws effective Dec. 31, 2002. Although he's not sure what the new tax code would look like, he argues that without such a deadline, Congress will simply continue tinkering rather than getting down to real reform.