C l e it4ignn lRaity "It's Not Practical - There's No Assurance That It Wouldn't Also Save The Russians" SILENT GOVERNOR: Secrey on Taxes Rankles Ferency :1 Seventy-Third Year EDirED AND MANAGED BY STUDENTS oF THE UNIVsrry OF MICHiGAN -- UNDER rAUTHorrY of BOARD IN CONTROL c STUDENT PUtJICATioN5 he oi onArree STUDENT PUBLWCATIONS BLDG., Anx ABoR, MicH., PHoNE No 2-3241 Truth ill; rev- '.f; 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 NIGHT EDITOR: PHILIP SUTIN 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 proposals. 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 greatest. 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. S TE NEW CONSTITUTION prohibits a 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- dren. 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 Reshufflig... 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 tax. 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 taxes. 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 equitable. 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 By STEVEN HALLER 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 down. 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 party. 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!" I t x, * * * UNDERSCORE: 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 it. 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- corner. -The New Republic 7 4) By DAVID BLOCK 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 member. 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." THE AFRICAN BLOC took their 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- nent. 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 Council." 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- tion. THIS IS FORTUNATE. The 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 value. SIDELINE ON SGC: Organized Opposition To Speak Out HOOTENANNY: 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 By LOUISE LIND 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 that. 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 editor. 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 masse. 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 r "Well, We're Not Fanatics About Saving Money"t Lt/ ate OIL IP... ".