TUESDAY, APRIL 4, 1967
THE MICHIGAN DAILY
PAGE THRE
TUESDAY, APRIL 4,1967 THE MICHIGAN DAILY PAfW~ TWRKI~
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Congressmen Call for Equal Tax, No Surci
targe
I
WASHINGTON UP)-A presiden--
tial package is in the making, but
administration officials acknowl-
edge it won't go to Congress until
after midyear and could not be
enacted until 1968.
The White House is ignoring
proposals from some Congress
members for a bundle of imme-
diate tax reforms to whittle $3
billion to $4 billion from tax pre-
ferences which, it is argued, help
mostly the well-to-do.
Democratic Reps. Henry S.
Reuss of Wisconsin and Richard
Bolling of Missouri contend the
loophole closing approach should
be substituted for President John-
son's tax surcharge plan. It would,
they argue, bring less danger of
business recession than the tem-
porary 6 per cent levy on all pay-
checks and corporate earnings
starting July 1.
But the administration still in-
sists the surcharge will be needed
to offset inflationary pressures in
the second half of 1967. The tax
reform package being developed at
the Treasury, they report, will not
be unveiled until after Congress
acts on the surcharge.I
The surcharge is a flexible fiscal'
policy tool intended to produce
specific economic results, officials
argue, and early reform proposals
would jeopardize its enactment
and, if adopted, might distort its
effects.
The presidential reform package
will include some of the proposals able foundations in the Treasury's
urged by Reuss and Bolling, offi- view, are simply devices for tax
cials have indicated, but any reve- avoidance and for maintaining
nue gains will be canceled out by control of family dominated kusi-
other proposals-mostly tax relief nesses.
provisions for lower income tax- !*A clampdown on tax exempt
payers. bonds issued by cities to finance
The White House is standing new plants for private companies.
pat, they said, on oreders given by Half a billion dollars worth were
Johnson in January that the, re- floated last year, the Treasury
form proposals be designed "to says, as. cities wooed new plants by
avoid siginificant revenue effects." bestowing, in effect, the cities own$
The announced new tax plan tax exemption upon private firms.
for the aged also will be part * Curtailment of the "multiple
of the Johnson tax bundle, or surtax exemption," a provision
bundles, officials said. And the which has encouraged many large
loophole closers may include these: organizations-especially in ap-
" Some curb on tax exempt parel, shoes, small loans and other
private foundations. Many of the consumer retail fields-to organ-
estimated 20,000 private charit- ize' branches and outlets as sepa-
rate corporations. About $150 mil-'
lion of "unintended tax windfall"
is gleaned by managements which
thus, collect, many times over, a
tax exemption that Congress in-
tended for individual small busi-
nesses.
As senior members of the Sen-
ate House Economic Committee,
Bolling and Reuss attached to the
committee's annual report last
month a statement suggesting that
far more extensive reforms are
needed.
Their statement reiterated "this
committee's repeated recommen-
dations to reform our national
structure and to plug the loopholes
that allow so many, particularly
in the middle and upper brackets,
to escape their due share of the
national tax burden.,
"Such a reform would yield bil-
lions and in the long run would
make better economics than re-
peated resort to tax surcharge,
which perpetuates the present in-
equities in the tax structure," he
added.
The Congress members proposed
in effect that a start be made at
once toward wholesale elimination
of tax preferences which have
been estimated unofficially to
cost the Treasury well over $50
billion a year-about as much as
is gleaned annually from the per-
sonal income tax.
The estimates includes about
half of the estimated $40 billion
of deductions, exemptions and ex
clusions that are familiar pro-
visisns of the tax laws-the other
half embraces preferences so deep-
ly embedded in public policy they
seem untouchable, such as aids to
the aged, blind, needy, crippled
and impoverished.
Additional leaks have been crit-
icized for years in the corporation
and capital gains taxes, and- in
special treatment of the oil, gas
and various other industries.
The total of uncollected reve-
nues also includes two huge gaps
long recognized but not likely to
be seriously touched for years to
come.
These are:
First, the virtually all-inclusive
tax exemption of churches. Epis-
copal Bishop James A. Pike and
many other churchmen have de-
clared that churches-which are
increasingly using their tax free
status to buy into private industry
--shoud be taxed on their business
enterprises like other businesses.
Second, the illegal and therefore
untaxed income from gambling-
criminal earnings that now are
invested not only in rackets and
vice operations but in banking and
various other legitimate industries.
Proposals that the government
legalize and control organized
gambling-and in the process pick
up sums estimated up to $30 bil-
lion a year-have stirred no visible
interest in Congress.
Snipers Fire,
On British,
Disrupt Aden
Arab Extremists Fight
Long Battle, Protest
Visit of UN Mission
ADEN (W) - British troops
fought a day-long street battle
with sniping and bomb-throwing
Arab terrorists here yesterday.
"The situation is firmly under
control," reported security com-
mander Maj. Gen. Sir John Wil-
loughby during a visit to the cen-
ter of violence in Aden's Crater
District.
Ten British soldiers and 10
Arabs were wounded by bombs,
mines and bullets. British author-
ities-said two Arabs had been kill-
ed.
UN Mission .
Terrorist violence flared follow-
nig the arrival Sunday night of
the UN mission which is advising
on the problems of the Federation
S o u t h Arabia's independence
which Britain has promised by
19ยข8.
A demonstration in the teeming
Crater District sparked off the
first clash yesterday morning. Two
grenades were flung at troops.
From then on the rattle of gun-
fire and the crump of bombs re-
verberated through the city.
"They've been quite energetic,"
said Gen. Willoughby, who arrived
in Crater's market square minutes
after the last grenade had explod-
ed. "What I'm trying to do now is
stop people being killed, If it gets
any worse, I shall have to take
sterner measures."
Visit Sheikhdoms
The UN mission - Dr. Manuel
Perez Guerrero of Venezuela, Ab-
dusattar Shalizi of Afghanistan,
and Moussa Leo Keita of Mali -
is expected to be in the federation
several weeks and to visit most of
the 17 outlying sheikhdoms and
sultanates which make up the Fe-
deration of South Arabia.
The Arab terrorists want Aden
linked with the neighboring Ye-
men. This would effectively wreck
the federation.
The National Liberation Front
and the Front for the Liberation
of Occupied South Yemhen, the two
extremist nationalist parties which
direct the terrorism in Aden, are
boycotting the UN mission.
Labor Feuds DESPITE ELECTION SETBACK:
Continue; No Pro-DeGa ulie Legisla for
New strikes
Teamsters Continue
T, k A 1' TA R T.l-
Elected Assembly Head
-Associated Press
Donald Conaway, spokesman for the striking American Federation of Television and Radio Artists,
told reporters, "there are no negotiators" as he and his bargaining team walked out of negotiations
with the three major networks' representatives at the Labor Department last night.
TWO-THIRDS TO GO:
Informants Report U.S. Plan
To Reduce. German Troops
LONDON (A') - The United
States was reported last night pre-
paring a plan to reduce by two-
thirds its military forces in West
Germany but leave intact the U.S.
commitment to resist any aggres-
sor.
Informants said the troop re-
duction would be achieved by a ro-
tation system for the six U.S. di-
visions now stationed in West
Germany. The result of rotating
elements of each division between
the United States and Europe
would leave six instead of 18 bri-
gades in West Germany at any
one time.
The system would be launched
within 12 months if the plan goes
through, informants said.
'No Foundation in Fact'
In Boon, American and West.
German spokesmen denied that
the United States is considering
withdrawing troops from West
Germany.
"The report has no foundation
in fact," said an American spokes-
man.
A West German Defense Minis-
try spokesman also said the report
is "without basis." He said several
plans for overhauling the Euro-
pean defense system were discuss-
McNamara Starts Secret Study
Of Defense Contract Profits
ed in Washington last month but
that none foresaw the withdrawal
of two-thirds of the American
troops in Germany.
18,000 Troops Pulled Out I
In Washington, Defense Secre-
tary Robert S. McNamara announ-
ced Monday the United States has
pulled 18,000 troops and 21,000 de-
pendents out of Europe in con-
junctionrwith relocation of U.S.
forces from France.
The reduction of American
troops in Germany reported un-
der consideration comes at a time
when the British have prepared
tentative arrangements to pull one
entire bi'igade from West Germany
by 1968. This would bring the
strength of the Rhine army down
to about 50,000 from its present
level of about 55,000.
Key Elements
The American and British plans
are key elements of a wider pack-
age agreement provisionally reach-
ed last month in Washington
last month by envoys of the
U.S., British and West German
governments, informants said.
Their proposals now are being
studied in the three capitals and,
if approved, will be submitted to
11 other members of the North At-
lantic Treaty Organization for en-
dorsement.
1 alK; A1 VLAW 1js ]PARIS (P)- Supporters of Pre-
Out of Negotiations sident Charles de Gaulle displayed;
tight control over the French Na-
WASHINGTON (P)-Labor dis- tional Assembly yesterday, des-
putes ranging from truckers and I pite last month's election setback,?
train men to trash collectors and by reelecting Jacques Chaban-
television newscasters continued Delmas assembly president.
yesterday, but the threat of any Chaban-Delmas, 52, mayor of
new major strikes abated at least Bordeaux and still an enthusiastic
temporarily, tournament tennis player, got 261
Teamsters Union officials, nego- votes to 214 for Gaston Defferre,
tiating for 450,000 workers in a Socialist mayor of Marseille.
threatened nationwide trucking Defferre had the support of the
shutdown, took a breather to at- combined left. Two deputies did
tend the funeral of a Teamsters not attend the opening session,
vice president. four cast blank ballots and five
Frank. Fittsimmons, Teamsters voted for other men.
general vice president and other Gaullist a Majority
union leaders arranged to fly to Premiere Georges Pompidou
Chicago to attend services today hailed the vote, saying, "the re-
for John T. O'Brien, first vice sult does not surprise me. It shows
president of the Teamsters. two things: that we have the ma-
Walkout Any Time - jority, something I never doubted,
The teamsters, armed with a and what counts in our regime is
national strike vote from their the number of votes the opposition
members, could walk out any time. can get together to vote a motion
But negotiations are expected to of censure. Monday's results show
resume Wednesday with represent- that they the opposition are far
atives of some 12,000 trucking from having enough."
firms wtn strike beore thkng After the assembly elections in
rAm noabesegme of oe indu March, the Gaullists were calcu-
has threatened to shut down 1,500 slated to have 244 votes. But a
has theatgee trsutdwng 1,50 number of centerists deputies have.
of the biggest trucking firms if vague allegiances and the vote on
the Teamsters strike even a few the speaker indicated some are
of them.. ready to swing over to the Gaullist
Informed sources are pessimistic side, at least for such housekeep-
a tthe moment about the chances ing votes.
of a peaceful settlement. Resign To Vote
About 250 members of a small: The benches where the govern-
Cincinnati Teamsters local struck ment ministers usually sit were
at the Kroger Co. foodprocessing empty. Pompidou and all his mn-
Iplant but officials of a larger local isters resigned Saturday so the 22
which did not strilfe said the ss-
walkout was unauthorized. And
union sources in Washington saidNr m
the Kroger dispute is not connect- New P em e
ed with the national negotiations.
AFTRA Strike
The six-day strike of the Amer-L o a to C i
ican Federation of Television and
Radio Artists continued with no ATHENS, Greece (P) -King
new talks scheduled after union ATN Gre i - ing
officials walked out of negotiations Constantine swore in Panayiotis
cailed by federal mediators, When Canellopouloshas premier yester-
they walked out Sunday night, day, making him head of an all-
union representatives charged the conservative government loyal to
networks had made an "insulting" the monarchy. The new premier
offer. Details of the offer were not was empowered to rule with or
disclosed. without Parliament's approval.
A union spokesman in New York Seeking to end Greece's worst
said yesterday he will seek to political crisis in two years, the
broaden the strike to include all king swept aside the protests of
employes in the industry. The the largest party in Parliament,
union is demanding $325 a week the Center Union party, with
for newscasters and announcers whose leader he long has been
of the CBS, NBC and ABC tele- feuding.
vision-radio networks, plus higher Can Dissolve Parliament
bonus commercial fees. The net- Canelopoulos, head of the Na-
works' last reported offer was $300 tional Radical Union party the
a week, with a lower percentage second largest, was handed the
of extra commercial fees. premiership with the right to dis-
Municipal Workers solve Parliament if it refuses to
In Philadelphia, trash, piled up give him a vote of confidence.
after thousands of city workers Canellopoulos, a scholar and
took an unscheduled holiday in backer of the monarchy named 21
a dispute over pensions. Radical Union party deputies to
New York City firemen, who his cabinet. The king swore them
-chanceled an earlier threat of a in at once.
partial walkout, planned to decide Canellopoulos has to go before
their couse of action by today in ayfiamentPfo tedisapproves5
their pay dispute with the city. him he could dissolve it and elec-
New York policemen also withdrew ton coulddhavethd
a threat to picket City Hall. 4ons would have to be held within
Printers Plan Walkout ays.wift Reaction
But the New York Daily News The king's maneuver in the
suffered another work stoppage four-day-old Greek political crisis
when printers held a 10th on-the- brought swift reaction from ex-
spot union meeting in the com- Premier George Papandreou, who
posing room that halted produc was removed from office in July,
tion. 1965, and who heads the big Cen-
A wage dispute involving six ter Union party.
railroad shop craft unions, with
a potential strike threat APril l2,
hung fire temporariy. Talks were
expected to resume later this week. JOI N T H E
PSYCHOSEXUAL
REVOLUTION !
Petition for a glamorous, paying
position on the Gargoyle staff.
-o your part to celebrate the
5-LEAGUEaniversary of the "U" by
detoig it from within
VEL COMMITTEE Fantastic positions
available
-Asst. Business
_uT UIETIIIr Manager
members of the cabinet who were
elected deputies could vote for
Chaban-Delmas. Under the con-
stitution of the Fifth Republic, as
cabinet ministers they could not
do so.
President de Gaulle will be free
Thursday to name the new pre-!
mier and his ministers. Pompidou
is generally favored to be returned
to office.
When the new ministers take of-
fice, they will, under the constitu-
tion, automatically be out of the
National Assembly. Substitutes,
elected on the same tickets as the
deputies, will then take those seats
but will not be able to vote for 30
days. For this reason no important
legislation is expected during the
first month of the assembly's life.
Allies Try to S er
Saigon Area Roads
SAIGON (R') - U.S., Australian
and South Korean soldiers - a
combined force of perhaps more
than 10,000 men - ranged along
three sectors of South Vietnam's
fertile coast Monday in operations
designed to secure roads and drive
the Communists away from food
supples and into barren mountains
open to air attack.
If successful the operations, un-
der way since mid-March but dis-
closed only yesterday, are expected
to ease the movement of military
supplies as well as help farmers
and fishermen. Roads that the
Viet Cong have blocked since 1964
are important to movement of
farm produce to markets in pro-
vincial capitals and such centers
as, Saigon, Da Nang and Nha
Tsang.
r of Greece
is tan tine
Papandreou called the naming
of Canellopoulos " a gross scandal
which constitutes a relapse to the
July 15, 1965, coup." He has ac-
cused the king of abusing his au-
thority by firing him in 1965.
Papandreou, 80, has been vehe-
mently against forming a new gov-
ernment from the present Parlia-
ment. He has demanded that a
new caretaker cabinet take over
from John Paraskevopoulos, whose
[caretaker government quit' last
Thursday after becoming embroil-
ed in a dispute with the Center
Union over the parliamentary im-
munity of deputies.
Threatened Revolt
Papandreou threatened revolu-
tion three days ago. His followers
said revolution would mean fight-
ing, demonstrations and strikes.
The new premier told reporters
any attempt to create disturb-
ances would be put down.
Allied commands gave this run-
down of the operations:
-In their largest operation of
the war, about 4,000 Australian
soldiers worked along roads in
Phuoc Tuy Province, about 40
miles east-southeast of Saigon.
Dubbed Operation Portsea, the
campaign began March '21 with
some U.S. soldiers in the force un-
der Aussie command.
-The American phase - Oper-
ation Summerall - got under way
also on March 21 with 1,500 troops
of the 101st Airborne Division's
1st Brigade in Phu Yen and
Khanh Hoa provinces on the cen-
tral coast, 190 to 230 miles north
east of Saigon.
-The' South. Koreans are using
troops from two divisions in their
Tuy Hoa operational area, The
number of Korean soldiers involv-
ed was not disclosed but the force
was reported larger than the U.S.
and Australian forces. The Kor-
eans are seeking to secure High-
way 1, which runs along South
Vietnam's coast.
-The basing of U.S. eight-en-
gine B52 Stratofortresses in Thai-
land is being delayed. The planes
were scheduled to start arriving
there yesterday but U.S. and Thai
officials in Bangkok reported they
will not arrive at the Utapao Air
Base in southern Thailand for "a
week or two."
There was no explanation for
the delay.
On the political scene, Saigon
officials said Sunday's opening
round of viting in village elections
was a success despite Viet Cong
terrorists efforts to scare voters
away.f
A total of 219 villages. in 33+ of
South Vietnam's 43 provinces held
elections for village council seats;
Officials said 495,044 of 614,806
registered voters cast ballots. The
remainder of the villages will vote
on the next four Sundays of April.
Elections of hamlet chiefs begin
May 14.
WASHINGTON OP) - Secretary
of Defense Robert S. McNamara
has launced a secret study of the
profits industry reaps from the
nearly $40 billion in defense con-
tracts the government awards each
year.,
In a move to bring the fuzzy
profit picture into sharper focus,
McNamara has ordered what one
official described as "a sub rosa
study trying to find out the levels
of profits of defense contractors
and how they compare to the in-
vestment and risks involved." The
Pentagon, in response to a query,
confirmed that such a long-term,
"in house" study is being made.
The defense chief's action came
as top government officials, on
order from the White House, re-
viewed procurement and property
management practices of some
contractors.
Big Buyer
As history's biggest buyer of
equipment, supplies and materials,
the nation's defense establishment
last year awarded $8.2 billion in
contracts for everything from eggs
to warships. This was up sharply
from the previous year's $28 bil-
lion: The total is expected to go
even higher this year. Vietnam
spending alone is nearing the $2-
billion-a-month level.
How much of this is siphoned off
as excessive profit?
In nast periods of heavy. de-
That McNamara found it nec- ( profit of
aerospace companies on
essary to initiate an independent
-Pentagon study points up this
fact: even though the government
spends about $50 million a year to
maintain an army of more than
5,000 civilian auditors to keep tabs
on defense outlays, the profiteer-
ing-control machinery operates in
such a way that officials who man
it say it will be two years or longer
before they can give even a vague
estimate of any excess profits real-
ized from Vietnam-related spend-
ing.
One of the government's pro-
fiteering watchdogs, the Rene-
gotiation Board, has been ham-
strung by restrictive amendments
enacted by Congress since the Ko-
rean War. And the board's staff
has dwindled from 742 employes
in 1953 to 179 last year.
Curtail Disclosure
Another watchdog, the General
Accounting Office, sharply cur-
tailed public disclosure of exces-
sive cost cases at about the same
time the United States started the
Vietnam buildup. The changes in
GAO procedures followed com-
plaints by contractors and some
congressmen about the agency's
auditing practices.
Industry spokesman are quick
to dispute any motion that con-
tractors are getting fat at the gov-
ernment through. But they are
understandably concerned about
net sales after taxes was 3.2 per
cent last year, he said, compared
with 2.6 per cent the previous'
year.
But he said the increase resulted
from booming commercial sales
which are substantially more prof-
itable than government sales.
World News Roundup
LUNCH-DISCUSSION
TUESDAY, April 4, 12:00 Noon
U.M. International Center
Subject:
"ISSUES CONFRONTING PRESENT-DAY CHINA"
By The Associated Press
CHICAGO--Negotiators for 66
railroads and the Order of Railway
Conductors and Brakeman yester-
day signed an agreement which a
union spokesman said ruled out a
strike in the near future.
The agreement over a dispute
involving insurance coverage for
the union members was approved
by Judge Richard B. Austin in U.S.
Dist. Court. Judge Austin issued a
temporary restraining -order Fri-
day barring union members from
striking.
Negotiations will resume imme-
diately, the union spokesman said,
in an attempt to resolve all dif-
ferences between the 18,500-mem-
ber union and the 66 railroads.
* * *
TOKYO - Massed thousands
marched through Peking yester-
day calling for the ousted of Pres-
WASHINGTON - Secretary of
Defense Robert S. McNamara
ruled out yesterday U.S. attacks on
North Vietnam's MIG airfield
"under present circumstances."
But he said that policy could
change.
McNamara said "present tactics
are suited" to meet administrative
objectives.
Speaker: Mr. Franz Mogdis
Graduate student in Chinese Studies
Sponsored by the
Ecumenical Campus Center
For reservations,
call 662-5529
UNION
STUDENT TRA
Annurn ru ir
Regarding:
B'NAI B'RITH
H I L L E L FOUNDATION
1429 Hill Street
PASSOVER
1. Hillel conducts a SEDER (actually the 2
Sedarim) and serves lunch and dinner, except
when the Holiday occurs either during
school vacation or after the semester ends.