Speaker Gingrich has been planning hisrntakeover of Congress for more than tworndecades, just about all the country’srnproblems should have been rectified bvrnnow. Alas, the 100 davs are nearly pastrnas we go to press and tax day is almostrnhere, but the much-vaunted contractrnhas done nothing to alleviate the incomerntax burden on the average Americanrn(although Gingrich and companyrnare fiddling with the capital gains tax forrntheir countrv club buddies). If the GOPrnis smart, bv next tax day it will have forgottenrnabout capital gains and jammedrnHouse Majority Leader Dick Armey’srnproposal for a flat tax on income downrnPresident Clinton’s throat.rnThe income tax is a bad tax, butrnArmc s proposal is a winner on severalrnfronts. First of all, like other flat tax proposals,rnit simplifies the tax code enoughrnthat vou can file a return on a postcard.rnThe new tax rate would be 17 percent.rnA single man or woman could claim arnpersonal exemption of $13,100, while arnmarried couple filing jointly could claimrn$26,200. Each dependent is worth arn$5,300 deduction, but other deductionsrnwould not be permitted. A familx ofrnfour with an income of S50,000 wouldrnpa- taxes on $13,200, or $2,244. A familvrnof four with an income of $34,000rnwould pav no income tax at all. Thernrate of 17 percent would also apply tornbusinesses, which would subtract revenuesrnfrom expenses and pav a tax onrnthe difference.rnWhat’s more, Armev’s legislation,rncalled the Freedom and FairnessrnRestoration Act, recognizes the fictionrnof “unearned” (meaning investment)rnincome and would, as Gingrich’s contractrnpromises, eliminate the tax on capitalrngains, an outlandishK’ unfair tax onrnin’estors. As things stand now, an in-rnestor can be clobbered three times byrnthe IRS on one simple investment. Playingrnthe stock market, for instance, meansrnpaving a tax on the wages used to purchasernshares. Then the company pays arncorporate income tax, a cost borne bvrnthe compam’s owners, the shareholders.rnLastly, the shareholder pays a capitalrngains tax on dividends from his investment.rnYet there is more to Armey’s proposalrnthan the burden it lifts from arntaxpaer’s shoulders. It ends withholdingrnand requires Americans to write arnmonthly check to the Internal RevenuernService, a measure that would open taxpavers’rneves to the real cost of government.rnWithholding helps hide thatrncost. Moreover, Armey would cap federalrnspending and require the CongressionalrnBudget Office to calculate the riskrnto public health and safety and cost ofrncomplying with new federal regulations.rnOf course, the measure has its opponents,rnmany of whom march behind thernchariot of Citizens for Tax Justice. Thisrngroup, which receives 99 percent of itsrnfunds from the AFL-CIO, breathlesslyrnclaimed that Armey’s proposal wouldrnballoon the federal deficit by a minimumrnof SI32 billion a year, which, ifrntrue, would certainly doom the proposalrnamong liberal Democrats who mightrnotherwise grudgingly support it. Itrnturned out that GTJ tried pulling a fastrnone with some of Armey’s data. In fact,rnthe proposal would increase the deficitrnonly $40 billion, which as Armey says isrna problem easily remedied with a fewrnminor spending cuts. Professor Armcvrndid not spare the Clinton administration’srngoofy analysis a failing grade cither.rnWhen the Einsteins in Clinton’srnTreasur- Department published theirrncritique, Armev’, an economics professorrnb trade, found a $500 billion error. Ofrncourse, Clinton’s myrmidons still sa thernproposal is not “revenue neutral,” whichrnis true provided no steps are taken to cutrnfederal spending severely. But that isrnsocialist math for you.rnArmey’s supporters abound. ‘I’hcrnmost important are the hundreds ofrnAmericans who wrote to him after hernpublished a piece about his proposal inrnthe Wall Street journal. They like it becausernthev have become galle sknesrnchained to the federal goxcrnment’srnsinking ship. Working Americans spendrn5.4 billion hours wondering how muchrnthey owe the government and worringrnabout an audit. Even worse, the averagernfamily now pays more in taxes than itrnspends on itself. Americans work fromrnNew Year’s Day past Independence Da’rnto support government. As one manrnfrom New Jersey put it, “I am a seniorrncitizen (WWII) who the President saidrnwhen we were oung we saved the world.rnI didn’t save it for the IRS.”rnThat is reason enough to back thernproposal, but here are two more.rnLawyers and accountants, who get richrntranslating the tax code for the untutored,rnget the shaft. “It’s hardly an accident,”rnbusiness writer Robert Deitzrnsays, “that over the past several years lawrnand accounting firms’ revenues nationwidernha’e almost doubled, at the samerntime the gross national product hasrngrown by only about one-fifth that increase.”rnInterpreting the tax code, ofrncourse, means exploiting deductionsrnthat are really a form of social control.rnAs Armey says, “through a bewilderingrnarray of deductions, exemptions andrncredits, the politicians who wrote therncode tell us . . . that investing in a municipalrnsewer system is better than investingrnin the next Microsoft. . . . A governmentrndoes not have the right to usernthe tax system to massively influence therneconomic decisions of its citizens.”rnCommon sense like that gave thernGOP its majority in both houses. Thisrnbegs the question of whether the StupidrnParty will answer opportunit, which isrnbanging down the front door, or roll o’errnin bed and pull the covers over its head.rnLfnhappily, a spokesman for Arme’ sa srnthe flat tax proposal will not land at thern a s and Means Committee untilrnyugust, which means it does not standrna chance of coming to a ote anytimernsoon.rnThat is too bad, because Armev’s planrnis faithful to the contract and benefitsrnthe little guys who earn less thanrnS50,000 and do not have enough to investrnto make a reduction in the capitalrngains tax an immediate, tangible benefit.rnThev care less about what the willrnpav when they sell a house fic earsrnhence than about what thc pa in taxesrnevery week.rnGuru Gingrich can prattle on aboutrnMega’Lrends, Alvin Toffler, and capitalrngains all he wants. He can forcernCongress to obey federal laws becausernthe rest of us do and never ask why thernfederal government should pass them orrnanyone should obey them in the firstrnplace. But all the fast talking and windowrndressing on Capitol Hill will notrnamount to a hill of beans if Americansrndo not get a break on the fee thc- pa forrntheir franchise. Otherw isc, thev may tellrnthe new pachyderm potentate and hisrnbush beaters in the Stupid Partv to packrntheir trunks and leave town.rnR. Cort Kirkwood is managing editor ofrnthe Arlington Courier and McLeanrnProvidence Journal, weekly newspapersrnin Virginia, published by DearrnCommunications.rnAPRIL 1995/47rnrnrn