It began life as the golden boy of the '81 tax bill - a sudden star that thrilled accountants and captured the hearts of corporate treasurers everywhere.
Now, the ''safe harbor'' leasing provision is a piece of legislation with a serious reputation problem. Deficit- and election-conscious congressmen, angered by what they consider abuses, have introduced 13 seperate bills to strike down the new leasing law.
''It certainly did get people excited,'' says Jeffrey Puma, tax accountant at Peat, Marwick, Mitchell & Co. ''Now they've had a chance to look at the provisions, and there are some very real concerns.''
Dropped into the tax bill during the general frenzy preceding its passage, ''safe harbor'' leasing, in effect, allows unprofitable companies to ''sell'' their tax credits.
Under the provision, cash-squeezed corporations lease needed new plant and equipment from more profitable corporations. The company that puts up the money gets to use any applicable investment tax credits and accelerated depreciation write-offs. Part of the tax break gets passed to the unprofitable partner in the form of reduced leasing payments.
The Congressional Budget Office estimates the leasing provision will deprive the government of about $4 billion in taxes for 1983. Through 1986 the loss will be at least $27 billion, according to Department of Treasury figures.
Under the new law, leasing deals become paper shuffles of impressive complexity. Critics charge the deals are ''leasing'' in name only - that, in fact, they are loopholes aiding the corporate rich as much as the corporate poor.
''Corporate welfare,'' says one congressional aide about the leasing law. ''Dissemblance in the tax code,'' grouses another.
Leasing began to raise eyebrows during early November as a series of multimillion-dollar tax-break sales culminated with Occidental Petroleum - a profitable growth company - peddling its tax breaks to Marsh & McLennan for $20 million to $30 million. With Congress rattled by the specter of $100 billion deficits, the Occidental deal was, to put it charitably, poorly timed.
Calls for repeal came whooshing in with the winter wind. Thirteen bills (five Senate, eight House) that would strike down safe-harbor leasing are now pending.
A Senate Finance Committee aide says leasing is ''one area the committee is looking at very seriously to do something about.''
The committee chairman, Sen. Robert Dole (R) of Kansas, has reportedly told businessmen who want to take advantage of leasing that they'd ''better hurry.''
The committee aide says this is a ''pretty accurate'' reflection of Senator Dole's attitude.
Many economists and tax accountants, however, say repeal is too harsh a solution. There may be some problems that need touching up, they say, but the basic principle of leasing is a sound way to let companies with no cash flow take advantage of tax breaks.
''Leasing is a very fundamental part of the whole (accelerated depreciation) scheme,'' says Ken Simonson, tax economist for the US Chamber of Commerce. ''It is quite an efficient way of getting tax breaks to the companies that need them.''
Mr. Simonson says much of leasing's negative public image is the result of ''a lack of understanding.''
One alternative considered before the tax bill passed was a straight, refundable tax credit. Under this approach, if a company has no profit and therefore can't use its tax break, the US Treasury would send it a check covering the full amount.
''Politically unpalatable,'' is the assessment of this approach given by an aide to Sen. Claiborne Pell (D) of Rhode Island, whose bill to end leasing has the most cosponsors of any in the Senate.
Refundability ''is an unrealistic answer,'' says Gary Pompan, a tax accountant with Ernst and Whinney. ''If you think leasing is abusive.. . .''
''What the leasing provision needs is modification,'' Mr. Pompan says. For one thing, regulatory technicalities apparently prevent small, close-held businesses from taking advantage of the statute. And Pompan suggests some congressional objections could be eliminated by a limit on how much big corporations can pay for tax breaks.
But leasing may be turning into a scapegoat. Whatever real problems there may be with its provisions, eliminating leasing represent a $4 billion plum to a Congress desperate to reduce the federal deficit.
Faced with the choice of raising taxes or continuing to hack away at federal spending, ''getting rid of leasing is going to look like one of the more palatable things you can do,'' says a finance committee staffer.
And there are indications that even the business community is uneasy about the bad public image of the leasing law. While theywould prefer to move slowly, many businessmen are saying: ''If there's any danger of losing any part of the tax bill, leasing is one of the more expendable parts,'' comments Mr. Simonson of the Chamber of Commerce.