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The Age of Reagan Washington IF THERE’S ONE politician in the United States who knows the pitfalls of tax politics, it’s Ronald Reagan. Should the Republicans persist in rubbing it in over Geraldine Ferraro’s finances, they could quickly find themselves in a big mess. The president and the first lady now decorously publish their tax returns each year for all to see. But it wasn’t always so. A decade ago Reagan’s budding political career came close to foundering over questions about how little he paid and his repeated failure to disclose the details of his personal finances. Today, even as spokesmen for VicePresident Bush question Geraldine Ferraro’s finances, fresh inquiries are being raised about the handling of Bush’s own fortune. Unlike Reagan, Bush does not currently make his tax forms public on the grounds that to do so would defeat the purpose of his “stringent” blind trust. Beyond the narrow issue of tax politics brought td’ the surface by the attacks on Ferraro lie the broader questions of protecting the public from conflicts of interest. * * * * As a fiscal conservative, Reagan, in his California gubernatorial campaigns, argued that the “pain” of paying taxes -should heighten the citizenry’s sense of responsibility about keeping down the costs of government. At the same time, he refused to disclose details of his own finances on the grounds that it was an invasion of privacy. By the time Reagan became governor in 1966, he was a wealthy man. The story is familiar: he had grown up poor in Illinois, then left sports broadcasting during the Depression to sign a movie contract for $200 a week. His salary eventually rose to $150,000 a year, but Reagan was never a really big star. After the war he worked for General Electric James Ridgeway’s columns examining the Reagan era will be a regular feature of the Observer. Records and Bush Ridgeway as a public-relations representative and as a performer on Death Valley Days, from which he reportedly drew a sixfigure salary. Reagan invested well, but he did not come into really substantial wealth until after he entered public life. Following his rousing speech in support of Barry Goldwater at the 1964 convention, a small group of well-to-do Californians, including William French Smith, persuaded him to run for governor. Since Reagan had to give up acting as a livelihood, this group took over his finances. In 1973, the Reagans appear to have paid $7,800 in federal income tax on an income of more than $110,000. The basis of the Reagan fortune was two land purchases one of 236 acres, the other 54 acres that he had made earlier on his own in the Santa Monica mountains north of Los Angeles. The land abutted 2500 acres owned by 20th Century-Fox, which was used for film locations. In December 1966, less than two months after he was elected governor, the studio bought the 236 acres outright and took an option on the 54 acres from Reagan for $1.9 million, or about $8000 an acre. Reagan had paid $85,000 for both parcels. The governor said he sold out because he couldn’t afford to pay $24,000 a year in property taxes. In 1974, shortly before Reagan left office, Twentieth Century-Fox sold all its land in the area, including the 236 acres it had purchased from Reagan, to the State Parks and Recreation Board for $4.8 million, or $1800 an acre. The company retained rights to film in the area for a daily rental fee. Fox never picked up the option on the 54 acres, and two years into his first term as governor Reagan used this land as a down-payment on a 778-acre ranch in Riverside County, which he bought for $347,000. Plans for the ranch did not materialize, and Reagan eventually sold it in 1976 for $856,500. Ever since these transactions, investigative reporters and political opponents have pored over Reagan’s -land dealings for evidence of impropriety without success. Reagan’s associates have answered questions again and again. In 1980, William French Smith, Reagan’s attorney, who would go on to become attorney general, said: “There is not a scintilla of a reason” for Fox to have purchased the Reagan land except that it needed the property. Thus it was that Ronald Reagan became a millionaire. * * * In May of 1971, as Reagan was explaining to reporters that California was so strapped for cash it would have to expand its borrowing, he let slip the fact that he had not paid state taxes in 1970. The governor’s salary was $44,100. Reagan attributed his nonpayment to “business reverses.” He went on to say that for the last couple of years he had been receiving “rebates” on withholding tax from the federal government. When this news hit the headlines, the governor angrily called a press conference in Sacramento and gave reporters a tongue-lashing. The press corps had “demeaned itself a little bit,” he said, “by engaging in invasion of privacy.” He said the reporters had asked “a question they already had an answer to,” and charged that “someone had illegally provided [his tax information] from the Franchise Tax Board. “Obviously I would have preferred to make money and owe a tax than to have lost money and therefore not paid a tax,” Reagan said. When reporters pressed him to clarify the status of his federal taxes, Reagan replied: “Why should I have to clarify the status?” Suddenly, the criticism of Reagan, which had been on the increase, widened. His tax status had become a major issue. Once again the governor called the press together: he had paid a little over $91,000 in state income taxes over the last five years, and the recession in 1970 was responsible for “investment losses” which had eliminated his state tax obligation. Newspaper reporters speculated at the time that his state taxes, based on salary and rental income, should have been around $3660. Reagan refused to discuss it further, but the controversy continued. When he The Tax of Reagan By James 12 SEPTEMBER 28, 1984