Reagan Tax Spokesman Backs ‘Fees’ Instead of Higher Taxes

An Administration tax expert warned Congress on Tuesday not to pass a money-raising package that would reverse “dramatic and important tax reforms,” and he called instead for passage of $6.1 billion in new “fees” outlined in President Reagan’s $1-trillion budget.

“The Administration continues to support the $6.1 billion of additional governmental receipts shown in the President’s budget proposal,” Dennis Ross, the Treasury Department’s tax legislative counsel, told the House Ways and Means Committee.

“The President has made clear his opposition to the budget reconciliation (passed by Congress) and its inclusion of a substantial tax over the next three fiscal years,” he added. “The Administration believes it is extremely important that we not undo any of the dramatic and important tax reforms that were accomplished last year.”

The hearings are the first step for the Ways and Means Committee in meeting its obligation under the budget resolution to find a way to raise an extra $64.3 billion for the government over the next three years.

Of that sum, $19.3 billion is needed in fiscal 1988, which begins Oct. 1, $22 billion is needed in fiscal 1989 and $23 billion in fiscal 1990. The extra money is needed to help run government programs while cutting the federal deficit by about $37 billion.

In a question-and-answer session focused on the definition of a “tax,” committee members challenged the distinctions between the revenue-raising proposals offered by the Administration and those under review by Congress.

“They are revenue increases,” Ross said of Reagan’s proposals, which include raising fees for use of federal lands and waterways, requiring employers to pay Social Security taxes on their employees’ tips and repealing certain exemptions from gasoline excise taxes.

‘Breach of the Pact’

“We would resist the characterization of them as tax increases,” he added, saying that any tax increase would be a “breach of the pact” reached last year when revisions lowered federal income taxes for many Americans.

“I find it difficult to accept the fact that, when you make a recommendation, it’s called revenue enhancement; if we do it, it’s called a tax increase,” said Rep. J. J. Pickle (D-Tex.). “That appears to be hypocrisy.”

The lawmakers have a 291-page list of ways to raise revenue, including higher taxes on alcohol and tobacco, higher fees on petroleum products and new twists in the federal income tax code, which was revised last year.