Scrap Tax Plan, Start Over, Liberal Organizations Ask

President Reagan’s tax plan is so flawed, so crammed with goodies for corporations and the well-to-do, that Congress should scrap it and start with a new bill that is fairer to the middle class, liberal grass-roots organizations said today.

Common Cause, Citizens for Tax Justice, Public Citizen and others found much to praise in Reagan’s proposal, especially its effort to exempt people below the poverty line from income taxes.

But, they said in testimony to the House Ways and Means Committee, the plan pales in comparison with the version recommended last November by the Treasury Department.

Robert S. McIntyre, whose labor-supported Citizens for Tax Justice has done extensive research into who bears the burden of U.S. taxes, said that, despite some good points, “the Reagan tax plan is . . . not even close to real reform.

“It continues previous policies favoring the richest Americans, it fails to redress the imbalance between individuals and corporations, it appears to entail a significant long-term revenue loss, and it does not deliver the knockout blow to tax shelters and economic distortions that the country desperately needs to sustain long-term growth,” McIntyre told the committee.

Added Joseph Goffman of Ralph Nader’s Public Citizen group: “Some of the provisions in the President’s plan--like the business depreciation system and the capital-gains preferences--are such bonanzas for profitable corporations and rich individuals that they almost defeat the whole principle of tax reform.”

Families making between $20,000 and $50,000 would average a tax cut of about $3 a week, Goffman said. “That’s not enough when people earning over $200,000 a year will get a $9,400 tax break,” or $180 a week, he added.

Former Sen. Floyd Haskell (D-Colo.), who heads The Taxpayer’s Committee, had similar complaints. “Can we justify as reform a bill that increasingly prefers an elite minority of workers over the bulk of the population?” he asked.