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BUSH SHOULD KEEP PLEDGE, VETO FLAWED TAX PACKAGE

Although surprising to many, considering its controversial nature, Congress' far-reaching tax package will probably be on President Bush's desk by Friday. It is a prime example of political posturing that will do nothing to energize the economy. Besides, the president has vowed to veto it.

Since there will not be enough votes to override, it is best to realize, as Sen. Ernest Hollings, D-S.C., said, "that the best politics is no politics."But Sen. Bill Bradley, D-N.J., expressed it most eloquently when he said that the bill will not only fail to jump-start the economy, it will provide very little tax relief. "The truth is that it will open up new loopholes, which primarily are used by wealthy Americans and corporations. And the truth is that given a choice between this bill and no bill, I choose no bill."

Well said. Economists have been saying for months that it is ridiculous to raise taxes in the middle of a recession. Yet this bill would raise the tax rate on upper-income Americans from 31 to 36 percent and levy a 10 percent surtax on milllionaires. The resulting revenues would be used in part to finance a $300-a-year tax credit for each child under 6 whose family makes up to $47,500 a year.

Although the credit would benefit 17.8 million families, it would also omit three-fourths of middle-income families. That means it fails even to accomplish the main goal of its backers - to give the middle class a tax break.

Moreover, the bill would be a job killer - raising taxes for small-business owners, those who create 80 percent of the jobs in the country.

For Bush, of course, any kind of tax hike in an election year when he has already taken considerable heat for tax increases he allowed in 1990 after he had given a lead-pipe guarantee of "No new taxes - read my lips" in 1988 would be anathema.

The bill does accomplish some worthy goals that have been tacked onto it - restoring tax-deductible individual retirement accounts for all workers, making interest on student loans deductible, and creating a capital-gains tax cut for middle-income investors in small business.

But another bill can accomplish those things.

Moreover, there is another rider that is especially offensive, placed on it by Sen. Jay Rockefeller, D-W.Va, that would impose an industry-wide tax on coal companies to fund retiree health-benefit obligations of a few companies.

Besides the fact that the provision appears to be unconstitutional, because it exempts one state, Montana, when taxes are supposed to be uniform throughout the country, it will alter the competitive balance in the coal industry by unfairly shifting responsibility from union coal companies to non-union coal companies.

Utah coal companies will feel the unwelcome effects.

In short, this bill is a mongrel creation destined to fail. It will not even begin to deal with that haunting national problem that politicians of both parties seem determined to avoid - the deficit.

Congress should own up to its failure and start over - probably after the election.