December 1984 Home   Newsletters

January 1985

February 1985

January General Meeting
President's Message (Dorothy Lum)
Report on Voter Services (Nan Luter)
Federal Tax Policy - The LWV Fiscal Policy Study
1985 Agenda for Superpower No. 1? (Dottie Gullicksen)
1985-86 Program Planning
What If There Was an Election and Nobody Ran?
Honolulu League Testifies at City Council (Astrid Monson)
Welcome to New Members
Calendar - Meetings/Events: 1985

Federal Tax Policy - The LWV Fiscal Policy Study

What is vertical equity? No -- it's NOT ownership of a high-rise condominium. It IS an important tax policy concept, as are tax burden... efficiency... regressivity. These and other terms will flow trippingly off your tongue after you immerse yourself in the League's exciting new fiscal policy study, Financing the Federal Government (FFG). This new study puts the League right in the middle of a critical and very current public policy debate as timely as today's headlines (just look for yourself).


The May 1984 national convention of the LWV approved a new position and new study on fiscal policy as well as a new method of doing the study. The implications for the future are challenging -- the study and subsequent member agreements will position the League to speak on significant issues of public policy. Fiscal issues-tax policy, the deficit, the funding of entitlements -- will be extremely important in the immediate years ahead. The LWV entry into this policy debate will be historic. But the League's "fiscal roots" date back many decades and show a continuing concern with fiscal policy and fairness.

IN THE 1920s, the LWV studied fiscal matters as part of its initial look at all levels of government and their taxing and spending patterns. Early on, the League supported a system of progressive taxation based on ability to pay.

IN THE 1930s AND EARLY 1940s, the League again looked at fiscal issues: adequate financing, control of inflation and a fair distribution of the tax burden. This led to an examination of the federal budget in the late forties.

FROM THE MID 1950s THROUGH THE 1960s the League's national program authorized state League opposition to resolutions in their state rates. As an effort to streamline program, this position was dropped from the national program in 1970. League tax policy concerns over the years led to incorporation into the Principles -- the concepts of government to which the League subscribes -- the following statement: "The League of Women Voters believes that... government should maintain an equitable and flexible system of taxation."

(See IMPACT ON ISSUES 1984-86, pg.10).


Convention '84 approved as a basic position the following general criteria for judging the federal tax system:

"Action to support a federal tax system that is fair and equitable; provides adequate resources for government while allowing flexibility for financing future program changes; is understandable to the tax-payer and encourages compliance, and accomplishes its objectives without creating undue administrative problems."

The new position incorporates the language of the Principles and enables the League to speak to federal tax proposals in a general way.

More specific positions are needed to enable the League to deal adequately with the many complex tax issues facing U. S. citizens today. Thus Leaguers will "evaluate U.S. fiscal policy; revenue sources including borrowing; tax expenditures; and the funding of entitlement programs."

This evaluation is projected over a two year period. By the end of the study members will have examined and reached positions on taxes, the deficit, and the funding of entitlement programs.

State One of this ambitious effort focuses on evaluation of revenue sources; income-based or consumption based including value-added (sales) and flat-rate taxes; progressivity/ regressivity; and the appropriate mix of taxes.


"New position" and "new study" don't tell the Whole story. There's a "new" method, as well. After a thorough pro and con discussion at convention delegates approved a direct member agreement method in order to lighten the burden on local Leagues already busy with the continuing LWVUS study of National Security as well as with crowded state and local programs. Since many local Leagues have occasionally used local bulletin articles and tear-off forms for reaching member agreement, the national board proposed and the convention adopted a similar method of study and agreement for the LWVUS fiscal policy study.

Members will receive the substantive article on taxes in the 1985 Winter NATIONAL VOTER, along with questions for member agreement and a tear-off response form for members to use in sending their views back to the national office.

In connection with the study some Leagues are planning to hold unit or general meetings in January and early February to discuss tax concepts, tax issues and tax alternatives. Other Leagues will rely on their members' individual study of the issues discussed in the VOTER article.

In any case, member agreement must still come from individual members, even if they are collected by Leagues or by unit and mailed in a group to the national office.

All tear-off forms must be received in the national office no later than February 15, 1985.

Watch for your NATIONAL VOTER Later this month or early February and be part of this exciting process!

Two references to look for in your library are:

Pechman, Joseph A., FEDERAL TAX POLICY, Fourth Ed. (Washington, DC: The Brookings Institution, 1983) A standard work that explains the tax system for the general reader. Covers changes in tax laws up to 1983 explains the legislative process for tax law and describes major tax concepts.

The Democracy Project, LESS TAXING ALTERNATIVES (New York: The Democracy Project, 1984). This very brief booklet contains two useful pieces for the initiated prober into tax issues. It describes the history of the income tax and its increasing baggage of tax preferences added over the years; it includes discussion of a simplified income tax and the flat-tax proposal and proposals for consumption tax.

If you wish to write for your own copy, here are the two addresses:

The Brookings Institution 1775 Massachusetts Ave., NW Washington, DC 20036

The Democracy Project 145 East 49th St., Suite 9D Washington, DC 20036

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