Few easy targets remain if Bush, Congress decide to increase taxes

When congressional leaders were angling for ways to slash the federal budget deficit in 1982 and 1984, they settled on some relatively painless tax increases they called ``revenue enhancement.'' Few taxpayers were hit hard, even though the two bills Congress passed - and President Ronald Reagan signed - raised taxes by about $50 billion a year.

Few such easy-to-swallow increases will be available to the next Congress and President-elect George Bush, even if they want to raise taxes, and there is a lot of evidence that they don't. After all, ``no new taxes'' was a daily theme of the Bush campaign, and congressional leaders say they are not about to push for higher taxes unless Mr. Bush goes first.

On the other hand, many economists and budget authorities say there is no way to make a significant dent in the $155 billion deficit without raising taxes. It is a matter of record that Mr. Reagan repeatedly stated his opposition to raising taxes but still signed more than a dozen tax increases during his tenure.

For example, to enhance tax collections, Congress sharply limited deductions for medical expenses and casualty losses; imposed (but later repealed) withholding on interest and dividends; doubled the cigarette tax; raised the liquor tax; limited tax-exempt bonds, and cracked down on executives' ``golden parachutes'' and tax shelters in general.

To help finance a reduction in tax rates, the lawmakers in 1986 repealed the deduction for sales taxes; restricted Individual Retirement Accounts; limited deduction of miscellaneous expenses; approved gradual repeal of the writeoff of consumer interest and wiped out the investment tax credit.

Assuming Bush and Congress eventually agree that more revenue is needed, where do they turn? Without regard to their popularity, here are some of the biggest targets and Congressional Budget Office estimates of what they would raise over five years:

Tax part of medicare benefits received by single people whose income totals more than $25,000 and couples above $32,000, raising $33 billion.

Tax employer-financed employee health insurance premiums exceeding $225 a month for a family plan or $90 a month for individuals; $47 billion.

A 5 percent surtax on individuals and corporations, $137 billion.

A 5 percent national sales tax on most products and services except food, housing, and medical care, raising $265 billion over four years.

Increase the lowest individual income tax rate (now 15 percent) to 16 percent and the highest (now 33 percent) to 35 percent, raising $147 billion over five years. This would hit couples with taxable incomes above about $31,000 and singles over about $20,000.

Boost only the highest tax rate, to 35 percent, hitting couples above about $74,000 and singles over about $45,000; $76 billion.

Permit deduction of only 50 percent, down from the present 80 percent, of business-related meals and entertainment; $18 billion.

Tax 30 percent of the capital gains from the sale of a home, raising $27 billion.

Limit the mortgage interest deduction to $12,000 (single) or $20,000 (couple); $10 billion.

Limit the tax saving for mortgage interest to 15 percent of interest paid; $56 billion.

Eliminate deduction of mortgage interest on second homes; $2 billion.

Allow deduction only of state and local taxes that exceed 1 percent of income; $22 billion.

Limit to 7 percent of income the deduction of state and local taxes; $21 billion.

Tax 85 percent (up from current 50 percent) of the Social Security benefits of couples making over $32,000 and singles over $25,000; $16 billion.

Tax half of all Social Security benefits, regardless of income; $32 billion.

Tax employer-paid life insurance premiums (the first $50,000 is tax-free); $14 billion.

Tax 3 percent of the value of employee fringe benefits except pensions; $20 billion.

Require all state and local government workers to pay for medicare; $9 billion.

Tax capital gains at death, raising $21 billion.

Require the estimated 8 million workers earning more than $45,000 a year to pay the medicare tax on everything they earn; the 1.45 percent tax now applies only to the first $45,000 earned; $35 billion.

Impose a $5-a-barrel tax on all oil, raising $106 billion. Applying it only to imported oil would raise $41 billion.

Boost the tax on gasoline and diesel by 12 cents a gallon; $57 billion.

Impose a 5 percent consumer tax on all energy used; $19 billion.

Double the cigarette tax to 32 cents a pack; $15 billion.

Raise the liquor tax, now $12.50 a gallon, to $15; $2 billion.