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Reagan Tax Plan Foes Cite Big ‘But’

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Times Staff Writers

Mostly, President Reagan’s tax plan is debated in lofty terms and as a matter of national priorities.

Now opponents, including Democrats, local and state officials, educators and public employee groups, are trying to take the tax reform question into living rooms and backyards and snap Californians into action on behalf of nothing more grandiose than their own checkbooks.

Californians do stand to reap tax savings of about $3.2 billion if the President’s sweeping simplification of the federal tax code is adopted intact, agreed some of the principal opponents who spoke out Thursday at two forums.

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Among them were Lt. Gov. Leo T. McCarthy, Los Angeles Mayor Tom Bradley, Board of Equalization member Conway Collis, Los Angeles County Supervisor Ed Edelman and Los Angeles City Councilman Zev Yaroslavsky.

But, and this was the big “but” that these officials emphasized, the loss of longstanding tax deductions for Californians will mean that the state will fare not as well as other states under the Reagan package.

To drive home the message, a new and punchy commercial, which already has begun appearing on television, was shown by McCarthy at a press conference at the home of Darryl and Polly Hans in Burbank. The Hans were introduced as typical, and typically worried, Californians.

“All these big-time tax loopholes and they’re coming after you ,” the narrator of the commercial warns an average Joe sitting in a backyard inflatable wading pool, “taking away the one fair shake you get!”

Joe responds with a fast burn and lunges frantically for the telephone to call his congressman.

The commercial, produced and paid for by a group called the Coalition Against Double Taxation, seeks to preserve the right to deduct state and local taxes, including property taxes, from earnings in computing federal income taxes. The coalition is made up of and financed by groups of teachers, municipal and state officials, and public service unions, according to its executive director in Washington. Its nationwide budget for airing the commercials is $1 million.

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In the case of the Hans family, these state and local tax deductions add up to $5,772 a year and “are the only deductions we’ve got. . . . We don’t have any tax shelters,” Polly Hans said.

She and her husband worry that they would end up paying up to $1,700 more in taxes under the Reagan plan.

McCarthy, whose press conference at a private home paid off with a good turnout of television cameras, acknowledged after being asked several times that, actually, the Hans family might save a little under Reagan’s tax plan.

But, as McCarthy sees the issue, it is a matter of fairness. Taxpayers in every state will benefit equally from reductions in income tax rates under the President’s plan. But with the loss of the deductions, McCarthy reasoned, Californians and residents of other states with relatively high state and local taxes will lose some of their gains.

Across town at a more conventional City Hall news conference, Bradley and the others spoke of the press of time.

‘Silence Is Consent’

“The message in Washington is simple. If Californians get active and vocal and involved, then we have a chance to retain this deduction. In this case, silence is consent,” said Collis of the Equalization Board.

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By all accounts, California is slower in reacting to its self-interest on the tax bill than other states. And the Democrats blame Republican Gov. George Deukmejian, who has been circumspect in his remarks, calling the tax bill a good start on reform.

McCarthy said he could understand that it is difficult for a GOP governor to tangle with a popular GOP President, “but some mild protest on the issue . . . might have been appropriate.”

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