Painless Remedy

Unpopular tax increases and painful spending cuts are the distasteful alternatives that Congress faces in reducing next year's federal budget deficit to the $144 billion limit required by the Gramm-Rudman measure. But now a growing number of lawmakers are talking about including a third, relatively painless remedy: a onetime federal tax amnesty that would allow past evaders to clear their slates--and at least part of Uncle Sam's--in a single stroke.

Since last month three amnesty bills have been introduced in the Senate, one of which has a companion measure in the House. Last week the idea got a boost from Ronald Reagan, who told reporters that an amnesty "sounds like a way to maybe end a situation in which we are losing billions of dollars from people who are not paying their just share."

Tax amnesty is hardly a new concept. During the past five years, 18 states have declared amnesties, raising more than $800 million in back taxes. New York, which expected to collect $200 million in a 90-day amnesty that ended Jan. 31, pulled in $334 million. The bonanza did not go unnoticed in Washington.

The potential revenue from an amnesty is enormous: $81.5 billion in federal taxes went uncollected in 1981 alone, according to Internal Revenue Service estimates, and amnesty proponents predict that a one-time program could glean $8.6 billion. But many in Washington doubt that tax dodgers can be enticed into paying up. Since studies indicate that most people who take advantage of state amnesties faithfully file U.S. tax returns, presumably because of stricter enforcement at the federal level, the House Budget Committee reckons that a federal pardon might raise only $1 billion to $2 billion. Critics of an amnesty, including the IRS, contend that the extra revenue would be canceled out by increased evasion from scofflaws banking on similar programs in the future. "Even if an amnesty is successful, it is a short-term benefit," said Republican Senator Slade Gorton of Washington. "It tells taxpayers that they are suckers."

Nevertheless, Senate Budget Committee Chairman Pete Domenici has promised to give an amnesty consideration in fiscal-1987 budget discussions. The committee has already rejected one unpalatable deficit cure. Last week it voted 16 to 6 against President Reagan's proposed budget. Six of the nays, just enough to have reversed the outcome, came from the panel's Republican majority.