‘Tax Reform Is a Sham’

In William Schneider’s article (Opinion, Sept. 1), “Tax Reforms,” the question was raised whether Congress suspects President Reagan’s commitment to tax reform is a sham barely hiding his aim of limiting the progressive nature of the tax code to further his social goals. Actually, even a most superficial examination of the operation of our tax system reveals an obscene confidence game, enough to make the investigator throw up his hands in despair.

John Kerry (D-Mass.), a freshman senator poking about in the jungle of Washington economics, found an astonishing figure: $122 billion. This is the amount that will be lost to the Treasury this year by tax evasion, enough to punch a huge hole in the deficit. Add to this the more blatant tax dodges, those that legally allow the five biggest arms makers to sail through April 15 without paying a red cent to Uncle Sam on their profit of $10.5 billion between 1981-1983--and to add insult to injury they received $620 million in refunds. A classic example is General Electric (Reagan’s former employer) with earnings of $6.5 billion in profits from 1981-1983 and receiving refunds of $283 million.

Sen. Howard M. Metzenbaum (D-Ohio) called attention to the irony of 13 corporations that signed a petition approving cuts in the federal budget, as voted by the Senate Republican majority. He asked: “Is the Senate aware that there are 13 corporations that are signers to that document . . . who had a free ride from their government for the last three years, who have not paid a penny in taxes, although they have profited to the extent of about $9.9 billion; that the government has given them tax refunds of $741 million, and they have the brazen gall to say to us, ‘cut Social Security, cut programs for the poor, cut programs for maternal health, cut programs for children, cut programs for everyone else, but make sure that we don’t pay any taxes’ ”?

The Children’s Defense Fund describes the cost of federal taxes on Jane Doe, a single mother of three children with an income just above the poverty line. In 1979 her income from her job was $8,000 and her taxes $481. In 1984 her income increased to $11,456 and her taxes to $1,384, tripling the 1979 level. Jane Doe paid more taxes than Boeing, General Electric, Dupont, Texaco, Mobil and AT&T; altogether, although these huge corporations earned $13.7 billion in profits.

And the charade goes on.

TED SCHOENMAN

Santa Barbara