TUESDAY, APRIL 4, 1967 THE MICHIGAN DAILY PAGE THRE TUESDAY, APRIL 4,1967 THE MICHIGAN DAILY PAfW~ TWRKI~ a cavaie .aaaava.ay F 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.