KELLY'S TAX PLAN WORTH CONSIDERING

State Auditor Margaret Kelly, the Republican nominee for Missouri governor in the Nov. 5 election, has staked all on a bold tax-cutting agenda she announced last week. Her plan is to slash taxes on working Missourians by $640 million. The Kelly plan drew immediate scorn and derision from Gov. Mel Carnahan, who prefers talking about tax cuts to actually delivering them, as he and the majority Democrats in the General Assembly could and should have done this year.

The Kelly plan is summarized in three parts:

1) $230 million: Elimination of the sales tax on food, bringing Missouri into line with the 31 other states that don't tax sales of food;

2) $350 million: A 10 percent tax credit for every individual taxpayer, meaning taxpayers would compute their tax liability and then credit themselves by 10 percent, reducing their check sent to the state by that amount;

3) $60 million: A tax cut for private pensioners by equalizing the tax treatment for private pensioners with that of government pensioners. Currently, retired Missourians receiving a government pension have the first $6,000 exempt from state income taxes. Retirees in private pension plans don't have the same exemption.

Taking them in reverse order, each has much to commend it. The last is a self-evidently needed reform. Pension income is pension income: Why should the tax man treat it differently because of its source? What possible rationale can there be for the tax collector's treating private pensions differently from those of government retirees? Indeed, it is a wonder no taxpayer has challenged this manifest inequity in court, as it almost certainly wouldn't withstand judicial scrutiny.

Individual income taxpayers got socked hard by Mel Carnahan's $310 million increase back in 1993, his first year in office. Kelly's 10 percent credit would mean that an individual taxpayer who had computed his tax liability at $1,000 would then credit his account by $100 before sending the state $900. For private-sector retirees, this would be in addition to the above-mentioned tax cut.

Finally, the elimination of the sales tax on food. Missouri is today among only 19 states that tax sales of food. We shouldn't. House Republicans have pushed this for the last three years, and a bill to do it passed the House before dying in the Senate on the last day, when majority Democrats didn't see fit to take it up for floor consideration. Carnahan says he wants to do this, also, but seems to lack any plan worthy of the name.

Not so with Kelly. She has a detailed, three-part plan she would match with a two-year spending freeze and implementation of recommendations for better management she has spent the last 12 years making as auditor. State spending has exploded under Carnahan, rising at nearly $1 billion each year. Hardworking, overtaxed Missourians, socked repeatedly by Carnahan and majority Democrats who have controlled the General Assembly for more than 40 years, are likely to look at the Kelly plan and ask themselves, "What's not to like?"