Dole Provides New Hints About His Economic Plan

Bob Dole came a few steps closer to fleshing out his long-awaited economic plan Thursday, calling for downsizing the Internal Revenue Service and adding another brick to the foundation of his so-called “small-business opportunity plan.”

In an address to several hundred small-business owners here in the capital of the Keystone State, Dole noted that homeowners who sell their houses can roll over profits without paying capital gains tax if they reinvest in a new home.

“My proposal would allow a similar rollover benefit for those who sell a small business and reinvest in another small business within six months,” he said to warm applause. “Keep it going, make it bigger, create more jobs and more opportunity.”

As the clock ticks down toward the Republican National Convention Aug. 12-15 in San Diego, the presumptive GOP presidential candidate spent Wednesday and Thursday in Pennsylvania talking about small business, jobs and the economy.

The trip served as a prelude to the unveiling of the Dole economic package, a plan promised since May but yet to appear. Although the former Kansas senator long has made reduction of the federal budget deficit his ultimate mission, the package is expected to have a major tax cut at its core. Dole is known to be considering two major variations--an across-the-board tax cut of up to 15%, or a repeal of the 1990 and 1993 tax increases with a return to the lower tax brackets that were in place in 1986.

Aides say the plan likely will be unveiled next week. Dole has been even more elliptical, dribbling out details of the small-business segment during his Pennsylvania stops and saying little else.

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Wednesday, in the community of King of Prussia, Pa., he said: “I’ll be announcing my economic package one of these days.” Thursday in Harrisburg, after published reports speculated on its contents, he said: “We haven’t announced it yet. Others have. It’s not my announcement. It’s not my plan.”

The Dole campaign decided several months ago to make an attack on the economy central to its fight against President Clinton. Clinton himself did the same thing when opposing then-President Bush in 1992.

Four years ago, the Democrats benefited from the inability of the Bush campaign to counter public concern about a lingering recession. Today, the economy is much healthier by most estimations. While real wages have remained stagnant for the past two decades, the unemployment rate has stayed in the mid-5% range for the past two years, the deficit is on the decline and an estimated 10 million jobs have been created during the Clinton administration.

Still Dole and his aides believe that the president is vulnerable on the tax front. To that end, Dole this week took aim at the institution Americans love to hate.

“It occurs to me that if we’re going to make the economy grow, we have to take a look at the IRS,” he said in Harrisburg. “I think we can downsize the IRS, maybe not end the IRS as we know it.”

That conflicted somewhat with his pronouncement a day earlier, when he told an audience at McKees Rocks, Pa., that “we ought to do away with the IRS as we know it.”

The common thread on both days, however, was his pledge to revamp the way Americans pay taxes. “We can make the tax system flatter, fairer and simpler, and that would be a big, big step in the right direction,” he said.

Among the measures designed to aid small business that Dole unveiled in Pennsylvania were capital gains tax relief, a “meaningful” home-office tax deduction and an increase in the health insurance tax deduction for the self-employed to 100%, from 30%.