From actress to lawyer to tax reformer

OVER scrambled eggs four years ago, a group of powerful Washington lawyers and lobbyists challenged Gina Despres to defend the Bradley-Gephardt Fair Tax reform legislation -- the forerunner to the final tax-reform legislation backed by President Reagan and expected to be signed by him shortly. Mrs. Despres, New Jersey Democratic Sen. Bill Bradley's legislative counsel on taxes, remembers the meeting as her ``trial by fire.'' Twenty men sitting around a conference table simply said, ``Explain yourself.''

She explained it and recalls, ``One of the things I learned as a result of that meeting, and others like it, was that if you are really serious about trying to do something that makes sense, you have in your own mind to distinguish what you believe and what you know.''

One of the things Despres believes in is tax reform -- something she has worked on steadily for the past five years. She has been described as Senator Bradley's ``coach'' on tax matters. And there is bipartisan agreement that Despres was a key force in shaping the direction of the tax bill. While Sen. Bob Packwood (R) of Oregon and Rep. Dan Rostenkowski (D) of Illinois were sharing the limelight of tax reform, she was one of the key staff people handling the spotlights.

Greg Ballentine, a former treasury official and now a tax economist with Peat, Marwick, Mitchell & Co., says, ``Gina had a key role in translating the Bradley-Gephardt bill into something which could be taken seriously. Through Gina's work, Bradley put together a program about which people said, `Yes, this can be done.' ''

A key moment in the history of the tax bill was when Senator Packwood suddenly realized that Bradley's idea -- developed with Despres -- of making the rates as low as possible and closing the loopholes was the way to go.

In an interview Packwood stated, ``I came around full circle to think that Bradley was right.'' This quote, in a magnified form, now sits on Despres's wall alongside the usual cartoons and a bumper sticker reading, ``Tax the Rich.''

Bradley made special note of Despres's contribution in a June 24 statement in the Congressional Record, stating that she ``. . . has lived with this project for five years and done so with intensity and commitment.'' The intensity extended to her family. Despres says her two teen-age daughters, Sarah and Naomi, ``know tax law better than most people.''

Despres did not arrive as a tax reformer in a conventional manner. She was born in Australia and worked as a model and actress. Her silver-screen career was brief, limited to such parts as an extra in an Australian film ``The Summer of the Seventeenth Doll.''

She met her husband, John Despres, in Athens and ended up in California during the height of the free-speech movement in the early 1970s. In 1976, two years after earning a law degree from UCLA, Despres, her husband, and their daughters moved to Washington, where her husband went to work for the Arms Control and Disarmament Agency. She joined Caplin & Drysdale, a Washington law firm whose co-principal, Max Caplan, was President John F. Kennedy's commissioner of the Internal Revenue Service.

Despres later moved to the Department of Energy, where she worked on international energy policy and tax legislation, a useful experience, since ``this exposed me to the way policy is made with regards to the tax code to achieve social and economic objectives.''

Senator Bradley, by way of contrast, learned about taxes as he sank jump shots for the New York Knicks and discovered he was a depreciable asset.

From the Energy Department she moved to Senator Bradley's office in 1979. But it wasn't until April 1981 that she began actively working on tax reform. In the past, tax reform had run aground because reformers wanted to redistribute income by closing the loopholes but not lowering the rates -- thus shifting the tax burden to the upper-income earners. Despres decided instead to try to make the tax code fairer -- making everyone pay their share by eliminating the loopholes that allowed the wealthy to avoid paying taxes while at the same time dropping the rates. ``We wanted equal incomes to pay equal taxes,'' she says. Throughout the debate on the tax code, she consistently opposed giving special privileges. ``The more exceptions, the less fair the deal,'' she reasons.

This ``purist'' philosophy often received its share of challenges. She recalls facing a hostile audience of specialists in fringe benefits. Under the Bradley tax bill, health insurance was treated as income. (In the new tax code, it is still not taxed.)

Despres's theory was that if income tax rates were low enough, large fringe benefits could be treated as income, allowing consumers to pick and choose which benefits they wanted to pay for. With rates low enough, this would not be a tax increase.

Still, there are loopholes in the new tax bill, particularly beneficial to the timber interest in Oregon, Packwood's state, and the toxic waste cleanup business in Bradley's home state, New Jersey. Asked about these, Despres just smiles and replies, ``Every good politician has to take care of his or her state. The question is, can you do this in a way consistent with the general interest?''

Once the tax bill is law, Despres would like to turn some of her attention to US-Soviet relations. ``Like having a fair tax code, people expect the government to be able to manage important strategic relationships well,'' she says.

She has no illusions about turning fully to East-West relations. Already, tax lobbyists are calling her to talk about 1987 and prospective tax increases. --30--{et