Democrats Disagree on Raising Taxes : Dukakis, Jackson Aides Differ Sharply in Drafting Platform

Dukakis and Jackson campaign representatives drafting the 1988 Democratic platform split sharply Saturday over the idea of raising taxes, an issue that has cast a threatening shadow over Democratic presidential hopes since their disastrous defeat in 1984.

No sooner did supporters of the Rev. Jesse Jackson on the platform-drafting committee meeting at this island resort propose a tax increase aimed at the wealthy than backers of the party’s prospective nominee, Massachusetts Gov. Michael S. Dukakis, rejected the idea.

Although the informal discussion here was markedly civil and free from rancor, both sides said the differences between them are significant. And the Jackson forces seemed likely to try to force a showdown vote on the matter when the full 186-member platform committee meets in two weeks in Denver to consider the draft platform.

A Sensitive Question

The Dukakis campaign almost certainly has the votes to defeat Jackson on the issue, even if it is raised again on the floor of the Democratic National Convention in Atlanta next month, but the tax question remains a sensitive one for Dukakis. Not only does it revive memories of past charges that the Democrats are too willing to raise taxes, it also recalls criticism from rivals in the Democratic primary campaign of Dukakis’ contention that he could significantly reduce the federal budget deficit by simply enforcing existing tax laws more strictly.

“We won’t accept a tax increase,” said former Maryland Rep. Michael Barnes, who is monitoring the drafting committee on behalf of the Dukakis campaign. “It’s clearly a distinction between the campaigns.”

Eleanor Holmes Norton, who is Barnes’ counterpart for the Jackson campaign, seemed just as determined on the opposite side.

Asked by a reporter if the Jackson campaign might drop its proposal for an increase in personal income taxes, nearly all of which would be absorbed by those making more than $100,000 a year, she said: “Absolutely not.”

Norton called the Jackson budget embodying the tax increase, which supposedly would raise an extra $64.9 billion by fiscal 1993, the “driving force” behind Jackson’s candidacy. “We can’t drop that,” she said.

Norton charged that Dukakis and his campaign advisers “are afraid of the tax question. The ‘T-word’ is one that politicians run from,” she said. Norton also argued that “the Democrats risk being ridiculed” if they claim to offer a solution to the federal deficit without proposing a tax increase.

Dukakis supporters made little attempt to conceal the fact that they are worried about the political damage Dukakis might suffer if he were to call for a tax increase. That fear stems from the negative reaction to the pledge to raise taxes made by the 1984 standard-bearer, Walter F. Mondale.

Dukakis partisans rejected the notion advanced by the Jackson forces that unless they called for a tax increase, the Democrats would lose credibility. Noting that much the same argument had been made by former Arizona Gov. Bruce Babbitt, who proposed a national sales tax during his unsuccessful primary campaign, Barnes said: “Bruce Babbitt is a terrific fellow. But he’s not going to be the nominee of the Democratic Party.”

Sticking to Position

Barnes and other Dukakis backers stuck to their candidate’s position on deficit reduction, which the Massachusetts governor has maintained throughout his campaign: A tax increase should be considered only as a last resort, and meanwhile, the budget deficit can be reduced by cutting waste in government spending, lowering interest rates and unemployment and tightening tax enforcement.

Referring to the Dukakis claim that more than $100 billion in revenues go uncollected every year because of non-compliance with the tax laws, Rep. Robert T. Matsui (D-Sacramento), an early Dukakis backer, called this an “outrage” and said: “I think it’s wrong on our part to increase taxes on those who are paying without going after those who are not complying.”

Dukakis supporters also fretted about what a tax increase proposal would do to Dukakis’ image. “One of the reasons I supported Michael Dukakis is that I believe that as a governor and as a President he is the kind of man who will not tax and spend, tax and spend in the way the Democrats have been accused of doing before,” said Rachelle Horowitz, political director of the American Federation of Teachers.

But Janice Thurmond, an Athens, Ga., lawyer and Jackson supporter, contended that backing a tax increase in the platform would help Dukakis’ candidacy rather than hurt it.

Arguing that the Jackson tax proposal would help reverse Reagan Administration economic policies, which she contended work against the poor and in favor of the rich, Thurmond added: “We need to give him (Dukakis) an answer that is believable when he is accused of being a ‘tax-and-spend’ Democrat. It is irresponsible of us not to give him an answer so that he can look any Republican straight in the eye and say: ‘I am not a tax-and-spend Democrat, I am a raise-revenue Democrat.’ ”