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September 15, 1963 - Image 4

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The Michigan Daily, 1963-09-15

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C l e it4ignn lRaity

"It's Not Practical - There's No Assurance That
It Wouldn't Also Save The Russians"

Secrey on Taxes
Rankles Ferency


Seventy-Third Year
he oi onArree STUDENT PUBLWCATIONS BLDG., Anx ABoR, MicH., PHoNE No 2-3241
Truth ill; rev-


rials printed in The Michigan Daily express the individual opinions of staff writers
or the editors. This must be noted in all reprints.

AY, SEPTEMBER 15, 1963


Romney's Fiscal Plan:
Is It Adequate?

Iand Bad...

SEN. CHARLES BLONDY aptly described Gov.
George Romney's fiscal reform plan as
"packages under a Christmas tree-there are
some' good things and some bad things for
everyone." Unfortunately, the tax program
lacks the cheer of Christmas. Its provisions
generally bring gloom to those seeking true
fiscal reform in Michigan. Even the good por-
tions are too small and are balanced off by bad
The two best provisions in the governor's
program are the state income tax and the lift-
Ing of the sales tax from food and prescription
drugs. The first would provide a new and more
elastic base for the Michigan tax structure
while the second would remove a harsh tax on
low income families.
'It is the experience of state governments
that both an income tax and a sales tax are
needed if the state is to financially survive.
Michigan is one of the last states that does
not have this double tax base. Neither a sales
nor an income tax does the job alone, for
neither tax can provide the constant revenue
needed to operate an expanding state govern-
ment. The sales tax is too closely connected
with prosperity and fails to provide enough
money when times are hard, people are not
buying and the need for state services-such
as relief and unemployment insurance - is
AN INCOME TAX is a little more flexible,
being tied to earnings which may or may
not be spent. But neighboring states such as
Wisconsin and Indiana find that an income tax
alone will not yield enough revenue and are im-
posing sales taxes.
progressive income tax, the best taxing
scheme, the governor proposed a two per cent
personal, three and one half per cent cor-
porate and five and one half per cent financial
institution income tax, using the Detroit city
income tax base-a $600 personal exemption.
This wpuld yield $306 million just enough to
cover the losses created by other tax reforms.
The mee fact of an income tax provides a
ba.se for paying for expanded state services,
biut the rates are too low. To make his fiscal
reform package fit, Romney cut a so-called
"minimal needs" state budget estimate of $610
million to around $580 million-the amount of
revenue expected next year. A $17 million pen-
sion funding requirement, originally in the $610-
million budget, was removed and is now unac-
counted for in Romney's fiscal plans.
MINIMAL CUT of $13 million will short
change higher education and mental health,
two of the most money-starved of state serv-
Ices. Both need to expend, but they, having
somewhat elastic state support, will be hard
bit by a cut below the "minimal" level. The
governor, who first claimed the only economy
he could make was replacing the governor's
official limousine with a standard car, now
claims that he can trim $0 million from the
state's budget through economies. This can
only mean reduced services.
A three per cent personal and five per cent
corporate income tax would yield $356 million,
enough for modest increases in services. Such
rates would be more in keeping with the state's
needs than a static fiscal reform package.
The lifting of the exemption on food and
prescription drugs corrects a glaring inequity
in Michigan's tax structure. A low income fam-
ily spends a greater percentage of its income
on food than a higher income one. The more
than one quarter difference-7.3 per cent for
low. 5.1 for high income families-of income
spent on state local taxes by these two groups
reflects the sales tax burden.
However, the governor has dealt a harsh
blow to cities struggling to make ends meet
by his local option tax proposal. His regulations,
splitting a city income tax with the taxpayer's
home city, limiting such levies to one per
cent and forbidding corporate city income tax-
es, would cost Detroit $10 million, not the $5-6
million Romney predicted. It would also severely
limit the potentials of this tax source.-
THERE ARE ALSO three other drawbacks in
Romney's package. One is "senior citizen's"
property tax relief which would allow proper-
ty owners over 65 with homes worth less than
$5000 and income less than $2000 to defer
property taxes. However, the "relief" would cx-

tend the burden to the senior citizen's heirs for
the state has first claim on the property after
death. If the "senior citizen" lives a long life,
the "relief" will become a burden on his chil-
The second is the exemption from the cor-
poration franchise tax for corporations less
than two years old. The proposal is so loosely
drawn as to allow undue competition with es-
tablished firms, hurting the state economy rath-
er than helping it.
The third is the governor's proposal for state
payment of 20 per cent of school property taxes.
This will ease the property owner's burden, but
will not help hard-pressed school districts who
need more money. The only advantage to the
af4.. *sice Fl, a nns.rrl'kl% an fr oErtf ni:n+. rflcI

MUCH LIKE the way out New Deal Demo-
crats, Gov. George Romney seems to be
clinging tenaciously to a governmental concept
that went out with the depression: that an
income tax is an equitable measure of taxing
the people. Perhaps this was true in 1930, but
in these days of mobile citizenry and credit
buying, the income tax is as woefully outdated
as the property tax.
Commendably, Gov. Romney seeks relief for
property taxpayers, and this is as it should be.
Property taxpayers are admittedly over-burd-
ened. But what Gov. Romney fails to realize is
that income taxpayers are overburdened, too.
110 UNDERSTAND this concept, we must re-
view the basic intentions behind the original
levy of the property tax and then the income
The property tax dates back to feudal times,
when the amount of property a man had was
indicative of his wealth. Gold or currency was
not abundant and most of it rested with the
king. The gentry and the nobles held large fiefs
of land which were inidicative of their ability
to pay.
LATER, IN this country, with pioneers and
settlers claiming large tracts of land from
the wilderness and with no monetary expense
for the title, a man without money could be-
come a substantial landowner. Thus, the owner-
ship of property ceased to be any accurate cri-
teria of ability to pay. Today, much property
is held by older people, living on fixed incomes,
who are particularly hit by rising \property
So, with the decline of the property tax as an
accurate levy, the government turned to a tax
on incomes. Prior to the era of the thirties, an
income tax did in fact represent a man's ability
to pay. Goods were bought and sold for cash
only, and obviously the man with the most
cash had the biggest income. Therefore it
was sensible to assess taxes on income, because
the big earner, who was also the big spender,
could easily afford to pay the tax.
HOWEVER, TODAY we are experiencing a
steadily increasing bulk of taxes on the
individual to the point where he will soon be
unable to afford the luxury of having a govern-
ment. What is more, Gov. Romney's two per
cent income levy certainly, by all past stand-
ards, cannot be expected to stay at any two
per cent. Almost certainly it will spiral upward.
so that any saving it will be to the individual
now woul be quickly wiped out.
But the income tax was not originally con-
ceived in this era of increasing governmental
regulations, decentralization and specialization.
industry and extensive credit buying. The gov-
ernment no longer purports to serve each citi-
zen equally.
GOV. ROMNEY proclaimis that it is time for
tax reform In Michigan. This is true enough,
but tax reform means just that-reforming the
philosophy of taxation as well as the structure.
The levy of an income tax in the State of
Michigan does not constitute tax reform. It
simply puts another crushing tax on the indi-
vidual. Rather it would seem that we should
progress to a more modern theory of taxation-
a tax on government usage. In other words, levy
a tax on those areas where government effort
is expended; make the various areas of govern-
ment self-supporting.
NOW TO AN extent, we have gone over to this
theory in Michigan. The State Highway
Department is run wholly on gasoline taxes,
for example, and the highway program in this
state is progressive and well-heeled.'
Here the burden of payment is placed upon
those who avail themselves of Michigan's ser-
vices, both Michigan residents and visitors,
which, in this day of inicreased mobility, is
Now granted this plan is fine in theory, but
in fact it can break down. The typical example
of its hardship is applied to the schools, where
the struggling young couple with several chil-
dren would be hard-pressed to pay full support
for their many children all the way through
the school system. Such an area is obviously
open to compromise; but it would seem that
there are so few of these areas that compromise
would indeed be possible.

NOW ALL THIS brings us- back to Gov. Rom-
ney and his income tax on personal earn-
ings. What the governor does not seem to real-
ize about the trends in taxation, the people do.
They have expressed themselves on this topic
many times and in numerous ways. They
voted an extra one per cent sales tax in order
to avoid an income tax two years ago; they
voiced a massive protest against the income tax
proposal last year, and they have turned an
income tax down by referendum at least six
times, the most recent in the forties.
Now it is all well and good to talk about what
is best for the people, and jobs and justice, and
all that. But let it not be forgotten that we still
maintain government By The People in this
state, and if the people do not want an income

AS OF LAST Thursday Gov.
George Romney's fiscal reform
program is a matter of record.
Yet, in one sense, it has been a
matter of record for some time, if
only in the form of bits and
snatches and more or less accurate
newspaper reports. In the hoary
press tradition of attempting to
scoop every other paper in sight,
hardly a day went by without at
least one new tidbit-purported
to have leaked from the lips of
some executive office assistant at
an unguarded moment.
Since this sort of thing is some-
what of a skilled art by now, it
should have surprised no one when
the governor's speech proved a
goodly number of the limb-crawl-
ers were right.
Romney, of course, was the ulti-
mate catalyst in this reaction. In
refusing to give out official details
of his program himself or to sanc-
tion their being dispersed by those
legislators to whom he had reveal-
ed them, he surely aided the spec-
ulators in their little game.
CHIEF AMONG the snipers,
which also came as no surprise,
was the "loyal opposition." Demo-
cratic Party State Chairman Zol-
ton Ferency had a grand time
leaning back in his chair with his
feet on his desk and spewing out
criticisms of Romney as fast as
the reporters could take them
The thing that rankledy Fer-
ency most was Romney's refusal
to let him in on every detail of
his program as soon as he though
Iof it. The Democratic leader felt
left out of things, and his daily
pronouncements grew more and
more petulant. And yet Romney
was not unfair: he kept the Demo-
crats no further in the dark than
he did the members of his own
The fact is that Romney held
several sessions with people who
really counted from both parties.
In addition to legislators, the gov-
ernor conferred w i t h citizen
groups and ferreted out advice
from every corner of the state. He
called forth the Voice of the
People and considered their man-
date as carefully as he did the
suggestions of the Lansing moss-
backs. In effect, then, one might
say that the plan he finally de-
cided upon was as much a pro-
duct of the people as it was of
the governor.
* * *
THIS SHOULD not be construed
as meaning that the final program
was designed to meed the desires
of everyone in Michigan. The
idea of a statewide income tax is
a bitter pill to swallow even for
someone who realizes the necessity
of 'it. Detroit's Mayor Jerome
Cavanagh has been protesting De-
troit's loss of. $10 million because
of Romney's plan to cut its non-
resident income tax down the
middle. Members of both parties
have come out against various
parts of the plan, and a few have
flatly decried the entire program.

But for every legislator who took
exception to Romney's program
another stepped up to defend it;
and when the smoke cleared away
one could see that the governor
might actually be faring better
with the Democrats than with his
own men. Ferency joined forces
with former Gov. John B. Swain-
son in praising the tax plan. Even
Lieutenant Gov. T. John Lesin
ski, who only a few days before
had called the program as good
as defeated before he even saw it.
strolled about the Senate chamber
wearing a smile as wide as his
girth and saying that he saw "no
reason why there should not be
Democratic support for it."
Not all the humor provided by
the after effects of the tax speech
was unintentional. One legislator
showed newsmen a spindly Christ-
mas tree on his desk and suggest-
ed the session might last until the
tree became appropriate. Another,
Sen. Charles S. Blondyregaled the
reporters with a catchy song:
"Double your pleasure, double your
fun, with two income taxes in-
stead of one!"




* * *

The Trial of Apartheid

MEANWHILE, Republicans anu
Democrats began the long chore
of ironing out the program to suit
their own constituents. Senate Tax
Committee Chairman Clyde Geer-
lings (R-Holland) prepared to
cover the western part of the state
and Rep. James Fobs (R-Horton)
prepared to tackle the eastern and
northern regions, in a co-opera-
tive effort to "solve the problems
at the local level," as Geerlings put
Between the ravings of Sen.
Philip ;Rahoi. and Cavanagh and
the calmer statements of Geer
lings and GOP stalwart Sen. Stan-
ley Thayer of Ann Arbor, there is
hopefully some middle ground. If
such exists, it will probably come
to light this fall. WVhen the Legis-
lature reconvenes in three weeks
for the actual deliberations, the
eyes of Michigan will be upon
them. Now that Romney has offi-
cially reported his program to the
people of Michigan, it's all over
but the shouting; and there will
be plenty of that in the Legisla-
ture this fall.
THE REASON most students
quit school is that they are
learning nothing, or at least no-
thing of value. In many cases the
so-called dropout is actually a re-
ject, overtly or covertly encouraged
to withdraw by the school author-
ities because he is causing trouble,
not learning. Who will benefit if,
by heroic efforts, these children
are persuaded to stay on for a few
more years? The statistics on un-
employment would improve, simply
because the unemployed would be
doing nothing in the back of a
classroom instead of on the street-
-The New Republic



AMONG the pressing issues to be
considered in the 18th session
of the United Nations' General
Assembly, convening this week,
is the question of the Republic of
South .Africa's status as a UN
This white supremacist state lies
at the foot of a continent where
political control by non-whites is
the rule. Last May in Addis Ababa,
a conference of 31 African nations
launched a drive to shake into sub-
mission the apartheid practicing
government of South African
Prime Minister Hendrik F. Ver-
woerd. The Black-Arab African
leaders agreed to cut off all rela-
tions with South Africa and even
went so far as to set up funds for
subversion and sabotage.
This external pressure did noth-
ing to weaken Verwoerd's policies;
in fact, he grew more adamant in
his position. In a recent speech
the prime minister said, "This is
a white man's country, and it will
remain that way."
case to the UN Security Council
last month, and sought a world-
wide trade embargo against South
Africa. The council defeated this
proposal but did pass a ban on
arms shipments to the white su-
premacist state.
This partial setback has com-
pelled the African nations to ask
the General Assembly for complete
expulsion of South Africa from
the UN. They claim that Ver-

woerd's program of apartheid not
only is a tyrannical method of in-
ternal control, but also endangers
the security of the entire conti-
Expressing the position of the
black Africans, External Affairs
Minister John Karefa-Smart of,
Sierra Leone said, "National bar-
riers cannot legitimately shrink
universal human rights."
* * *
THE CHARTER of the United
Nations states, "A Member of the
United Nations which has persist-
ently violated the Principles con-
tained in the present Charter may
be expelled from the Organization
by the General Assembly upon the
recommendation of the Security
However, the document also
mentions that, "Nothing contained
in the present /Charter shall au-
thorize the United Nations to in-
tervene in matters which are es-
sentially within the domestic jur-
isdiction of any state ..."
It is evident that the Security
Council must now decide wheth-
er apartheid is a matter of South
Africa's internal affairs or, in-
stead, a policy whose effects cross
national boundaries and are mat-
ters of worldwide concern.
Since three permanent members
of the council, the United States,,
Great Britain and France, were
not in favor of the proposed South
African trade embargo last month,
it is highly unlikely that they
would vote to expel Verwoerd's
country from the world organiza-

elimination of South Africa from
the UN would accomplish little.
Much in the same way as Commu-
nist China's exclusion from the in-
ternational body has prevented the
organization from having any con-
structive influence against the
Asian giant's atrocious domestic
and foreign policies, so would the
UN lose all opportunities for mod-
ifying South Africa's racial bar-
riers by expelling the country.
The African bloc should seek
stricter international c e n s u r e s
'against Verwoerd's regime and
continually apply economic pres-
sure on the republic. These actions
would eventually bring about a re-
laxing of the now firmly enforced
apartheid laws. However, any at-
tempt to obtain the expulsion of
South Africa from the UN would
most probably be defeated, and
even if successful, would serve little

Organized Opposition To Speak Out

Flashy Garden Type
THE WORD "HOOTENANNY" has become a craze which is now being
pushed with all the energy that publicity men and money can mus-
ter. Panhellenic's contribution last night was a flashy vehicle with a
variety of performers and a wide range of talent.
Allen and Grier led off the evening with a series of satirical songs
and takeoffs on various folk music artists. Perhaps the funniest bit
was a rock-and-roll takeoff entitled "Teen-age Mom." Their takeoffs
on Harry Belafonte and Richard Dyer-Bennett were well received, but
they had trouble with their other imitations as the audience obviously
hadn't the faintest idea who they were imitating. Allen and Grier were
entertaining and diverting, and, since they made no pretensions at being
anything more, did their job well.
*'* * *
ROBERT GLAZE, the second act on the bill, was perhaps the most
abominable "folk performer" that I have ever seen. Glaze turned every
song he sang into a moonstruck and corny rendition of "Sweetheart
of Sigma Chi." I am quite sure that my grandmother could have played
the guitar better although she would not have been able to achieve
the precise quarter tone flat that Glaze managed on the high notes.
Kay Britten, actress turned folk singer, had a very difficult time
with the largeness of Hill Auditorium. Her lovely voice seemed more
adapted to a small quiet gathering. She is just beginning on the "folk
circuit" and with time could very easily develop into a talented singer
of songs and ballads.
STEVE ADDISS and Bill Crofut were easily the outstanding per-
formers of the evening. Although they do not try to be ethnic in their
approach to folk material, they treat the material with sincere respect.
They sing their songs with genuine enthusiasm and managed to con-
vey this to the audience. Their singing of rounds and playing of one

ALTHOUGH random criticism of
Student Government Council
is always much in vogue, Council
itself rarely meets with any or-
ganized body of opposition.
Tomorrow night's open public
meeting, scheduled to hash over
proposed SGC regulations on
membership selection practices
among student groups, will change
Council meetings on Wednesday
nights are notably unattended by
the student body; any dissension
seen in the Council chambers is
usually between members of the
Council rather than between
Council and its electorate during
constituents time.
Any students who do dissent
with Council procedings-after
reading about them in Thursday's
Daily-are usually content to pass
over them with a brief witticism
to their roommapes. The more
militant write letters to The Daily
TOMORROW'S open hearing
will be a sharp deviation from
this norm.
The purpose of the meeting is
clear. Those groups who will be
affected by the proposed regula-
tions on membership selection
practices ought to be" given a
chance to express their views-
dissenting or otherwise-before
the regulations become formal leg-
islation. Thus, tomorrow's meet-
ing will offer this opportunity.
Fraternities and sororities-the
groups most likely to feel the
brunt of this legislative blow-
have been given advance notice of
the meeting and copies of the
proposed regulations. They are ex-
pected to turn out, dissenting, en
This body of dissenters could
quite feasibly have more far-
reaching effects on the Council

full strength against alleged dis-
crimination. Caution was the
watchword as Council members
recently debated a proposed set
of membership selection regula-
tions and decided to strike a
paragraph barring alumni control
in the area. This hesitation con-
siderably weakened the proposals.
Yet fraternities and sororities
will still find much to criticize.
As Council meets with its con-,
stituents tomorrow night, one can
only hope that it will not be ad-
versely affected by the organized
opposition it is bound to meet.
The opposition should at last be
heard and Council should attempt
to reconcile these groups to the
proposed legislation, not appease
them by weakening the legisla-
tion. Hopefully, it will not be
moved to further emasculate the
proposals before taking formal ac-

tion on them at its regular Wedgy
nesday meeting.
SUCH A MOVE is not incon-
ceivable. With SGC elections only
a few weeks away, it is only na-
tural that those members seeking
re-election are already wooing
popular support. It is an acknow-
ledged fact that fraternities and
sororities account for a large por-
tion of votes cast in the election,
Since these groups normally vote
as a block and, thus, wield much
power, they must be a major con-
sideration of any SGC candidate.
Such considerations ought not
to cast a shadow in the light of
passing a strong program against
alleged discrimination. Council
members ought, tomorrow night
and in the future, to forego poli-
tical considerations and stand firm
in the face of \their constituents.

" 11


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