Forbes, Flat Tax a Hit at Fund-Raiser

TIMES STAFF WRITER

Presidential candidate Steve Forbes on Wednesday night pushed his proposal for a 17% flat tax to a gathering of Orange County Republicans.

"American today is a frustrated nation," the multimillionaire publisher told about 300 people at a GOP fund-raiser at the Hyatt Regency in Irvine. "No one outside of Washington could have consciously devised something more incomprehensible, more complex, more corrupting and more anti-anything you like than the tax code we have today."

The stop was the candidate's second of the day in California on a campaign sweep expected to raise $200,000 for the Republican Party.

"We must begin by changing the culture of Washington," Forbes told his Irvine audience, which responded with several standing ovations. "It's not enough to send good people there."

His plan would tax all earned income at 17%, scrapping deductions for items such as mortgage interest payments and charitable gifts. In a boon for the wealthy, it would exempt individuals from taxes on investment income, capital gains and inheritances.

He also said he supports more parental control over education, a new social security system for people who will retire after the present system is broke, and a "homesteading act" whereby tenants in inner-city housing projects would take over for their housing authorities.

"I can't believe that in some of those projects the tenants could do a worse job than the housing authorities," Forbes said.

Earlier Wednesday in San Francisco, Forbes had shrugged off a comment he made Sunday that "political necessity" might force him to retool the plan to require individuals, rather than businesses, to pay taxes on investment

income.

Forbes Wednesday said he was "just twitting" his NBC television interviewer.

"I jocularly said to the person on 'Meet the Press' that if you demagogue the issue of a tax break on investment income, then you're going to create a political climate that will make it very hard to keep it at the business level," Forbes said.

Campaign manager Bill Dal Col said Forbes "has not changed his plan. He has no plans to change his plan."

Forbes' flat-tax plan is the centerpiece of a $10-million television advertising campaign that has landed him into second place in polls in several early-contest states. And in an Arizona poll released Wednesday, Forbes tied with Senate Majority Leader Bob Dole (R-Kansas) among Republicans who have either decided on a candidate or are leaning toward one.

A graduate of Princeton University, Forbes, 48, is expected to spend as much as $25 million of his own fortune on the campaign.

"Some people see America as a fortress," he said. "I see it as a shining house on the hill. I'm an optimist. I believe that when historians look back at this era they will see that America once again took its place as the leader and the inspiration of the free world."

Forbes is the eldest son of Malcolm S. Forbes Sr., the late media tycoon who drew widespread attention by flying hot-air balloons, driving motorcycles and escorting Elizabeth Taylor.

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