Tax Bills Find Money for Smaller Interests

To hear proponents tell it, the big winners of tax bills approved by the House and Senate last week would be hard-working middle-class parents, students struggling to finance a college education, and businesses and investors who generate new jobs.

But a host of smaller interests would cash in too.

Clinging like barnacles to both tax plans are scores of detailed proposals to slash taxes for a variety of narrow interests, including bakery companies, apple cider distillers, low-income farmers, luxury boaters, sky-diving instructors and even whaling captains.

Under provisions in the House and Senate tax bills:

* Truck drivers, airline pilots and laborers in Alaskan fishing camps could claim more-generous deductions for meals away from home.

* Friends and relatives of business executives would be spared the expense and inconvenience of reporting fringe benefits when they hitch a ride on a corporate jet.

* In a long-standing priority of Senate Finance Committee Chairman William V. Roth Jr. (R-Del.), states served by Amtrak would be able to tap a new federal Inter-city Railway Fund to be financed by siphoning off half a penny per gallon from taxes now collected on gasoline and other fuels.

Congressional tax writers are often criticized for taking “rifle shots”--carefully targeted proposals aimed at a tiny group of beneficiaries. But this year’s tax effort features “bow” and “harpoon” shots as well.

A proposal championed by Sen. Orrin G. Hatch (R-Utah) responds to makers and retailers of archery products, who have long complained about the excise tax on arrows. At the industry’s behest, Hatch has drafted a proposal to replace that tax, which is collected from thousands of sporting-goods retailers, with a new one collected from the hundred or so firms that manufacture four arrow components--shafts, points, knocks and vanes.

Sen. Frank H. Murkowski (R-Alaska) meanwhile, won Senate support for a provision that would grant whaling captains a charitable credit of up to $7,500 for food and equipment expenses incurred during hunts recognized by the Alaska Eskimo Whaling Commission.

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The tangle of proposed provisions would add another layer of complexity to the already byzantine federal tax code and deprive the Treasury Department of tens of billions of dollars over the next five years. Some tax experts and economists warn that few of the proposals would benefit the economy, and that in aggregate, they could do much harm by distorting economic decisions and corroding public trust in government.

The profusion of tiny tax breaks “is all too characteristic of what we’ve seen from past Congresses,” said William Niskanen, a member of President Reagan’s Council of Economic Advisers and current chairman of the Cato Institute think tank. “The big surprise is how quickly we’ve seen the Republican agenda shift from reform in the 104th Congress to business as usual in the 105th Congress.”