ANCHESTER, N.H. - Senator John McCain said yesterday that Governor George W. Bush's refusal to discuss closing tax loopholes perpetuates ''an egregious situation'' that protects special interests in Washington as well as Bush's contributors in the Republican Party establishment.
McCain, in an interview, said that his proposal to eliminate provisions in the tax code that enable corporate investors to write off billions of dollars in deductions had ''met with fierce opposition'' from big-money interests. And, as he presses the case against loopholes in his campaign, he said the mood in that monied ''establishment has gone from concern to fear.''
Before the interview, McCain's staff provided the Globe with documents detailing what they call clear connections between Bush and businesses that are sheltered by loopholes McCain wants to eliminate.
Although Bush is believed to have enjoyed tax benefits in the past from loopholes affecting the oil and gas industry and professional sports teams, McCain said he did not deliberately target these enterprises. ''It was just the best list we could come up with, the loopholes we thought ought to be closed,'' he said.
During Wednesday night's debate here, McCain challenged Bush to identify ''what corporate loopholes you would close.''
Bush responded by suggesting that McCain visit him in the White House. ''You can outline all the different corporate loopholes you think are wrong and we can pick and choose.''
''Why do we have to wait,'' McCain asked yesterday, ''to address an egregious situation that is the glaring example of the influence of special interests?''
Asked if Bush objected to the tax proposal in order to protect his own interests and those of his major contributors, McCain said, ''I don't know that to be true. But I'm frankly surprised that he wouldn't address loopholes that make the tax code 44,000 pages long and everybody agrees is a cornucopia of good deals for special interests and a nightmare for average citizens.''
Responding to McCain's remarks, Bush's communications director, Karen Hughes, said the governor ''is willing to take a look at loopholes in the tax code. But his first priority is to give every single taxpayer in America a tax cut.''
Hughes said she did not know why McCain was raising the issue three days before the New Hampshire primary. ''I think he's realized - as he's acknowledged himself - that his tax cut is too small and too close to President Clinton's for the Republican nominee.''
The Bush campaign objected to several features of the McCain proposal earlier this month in a detailed dissection of the plan. Bush objected to putting an end to the exemption for investment income of trade associations by noting that groups such as chambers of commerce use the funds for scholarships.
But McCain's complaint is not the first time Bush has been drawn into controversy regarding tax loopholes. A Dallas televison station, WFAA, and the Austin American-Statesman newspaper reported in 1995 that the Texas governor and a group of his wealthy Dallas friends were aided by a special break on local property taxes at a 1,100-acre retreat called the Rainbo Club in east Texas.
After the Rainbo Club, where Bush has a home, lost a tax exemption granted as a result of its claim that it operated a tree farm on the land, the group applied for a new break in 1991 on the grounds that the property was used for recreational purposes. As a result, Bush and his associates are taxed at one-eighth the rate of other property owners in the area, according to new reports at the time.
Bush, when he faced questions about the Rainbo Club four years ago, explained that the tax ''exemption is not targeted for a specific group of people. This is a set of laws that say we value land based upon its use. I pay whatever I am assessed.''
The McCain campaign document is designed to show how the Arizona senator's plan for federal taxes would affect Bush's backers. According to the research paper, McCain has targeted ''a number of special oil and gas tax loopholes that are dear to the hearts of the oil and gas industry that has contributed so heavily to George W. Bush's campaign.''
Oil and gas interests accounted for $1.2 million in contributions to the Bush campaign, according to a review of last fall's Federal Election Commission reports by the Center for Responsive Politics.
Another McCain initiative would prevent trade organizations, such as the American Bankers Association, from enjoying tax-free investments on interest-bearing savings accounts. ''Banking groups have been significant contributors to George Bush's campaign,'' the McCain documents say, citing $843,000 in donations from banking interests.
McCain also targeted tax-free bonds that subsidize stadium construction projects for professional sports teams. At the same time, McCain proposes to eliminate business write-offs for skyboxes in these new stadiums.
Bush's ownership role with the Texas Rangers major league baseball team ''was a perfect example of taking advantage of loopholes,'' said Howard Opinsky, McCain's campaign spokesman. ''He turned a $1 million investment into $15 million.''
The value of the Rangers soared after a new stadium was built for the team, with the bulk of the cost borne by the city of Arlington, Texas. When the Rangers were sold in 1998, Bush received $15 million for his share of the team. According to news accounts, Bush orginally paid $606,000 to become a partner in the team.
McCain said there was a ''direct relation'' between his tax proposal and his efforts to limit special interests' influence in campaign finance. ''These people,'' he said, ''clearly have excessive, inordinate influence.''
Globe Staff writer Anne E. Kornblut, traveling with Bush, contributed to this report.
