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June 01, 1979 - Image 8

Resource type:
Michigan Daily, 1979-06-01

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Page 8-Friday, June 1, 1979-The Michigan Daily
Carter discloses
financial info; tax
deductions questioned

WASHINGTON (AP) - President
Carter disclosed yesterday that his
large Georgia farm has made him a
millionaire, despite continuing losses
from his family pesiut warehouse.
Carter also disclosed that he is
having differences with the Internal
Revenue Service (IRS), which forced
him to pay taxes on the value of air
travel for his wife and daughter Amy,
and which may disallow a $12,000
deduction Carter is claiming for enter-
taining his staff.
THE PRESIDENT released a 45-
page packet of financial information,
including his 1978 income tax returns, a
detailed statement of personal assets
and liabilities, and a copy of a general
financial statement he and all other
high federal officials are now required
to make under a law which took effect
this year.
Among the disclosures:
" Carter's net worth rose from
$795,357.74 at the end of 1977 to
$1,005,910.25 at the end of last year.
White House lawyer RobertLipshutz
said the increase was due mainly to the
rising value of the nearly 2,000 acres of
farmland the president owns in Sumter
and Webster counties in Georgia.
" The family peanut warehouse,
which lost more than $300,000 under the
management of the president's brother
Billy in 1977, lost another $73,000 last
year and currently has a negative
value. Carter's trustee and business
manager Charles Kirbo, pumped loans
of more than $500,000 into the business
from Carter's more solvent farming
corporation. The warehouse is now
managed by Gold Kist Inc., and Billy
has completed a course oftreatment for
alcoholism at a Naval hospital in Long
Beach, Calif.
" The IRS billed Carter in April for

$2,704.26 in additional taxes after
auditing his 1977 returns. They said he
should have claimed less of a loss on
his warehouse business, and should
have paid taxes on the value of air
travel for his family members who ac-
company him on trips. Carter agreed to
"This shows the IRS can be as
unreasonable with the president as they
are with the rest of us," said presiden-
tial press secretary Jody Powell.
" Carter is asking the IRS for a quick
audit of his 1978 tax returns to see
whether it approves a deduction of
more than $12,110 which the president is
claiming for a "staff party and recep-
tion" paid for out of his own pocket.
Lipshutz said Carter's accountants
were uncertain whether the sum was an
allowable deduction, but decided to
claim it and call on the IRS for a quick
CARTER REPORTED a net income
of $267,195.76 last year, including his
$250,000 government salary, $13,440 in
interest, $11,466 in dividends, and $3,860
in capital gains, and a net loss from his
personal business pursuits.
The warehouse lost $73,572.44 last
year, which Lipshutz saidl was due
almost entirely to interest on loans to'
the business from Carter's farming
corporation and another loan of more
than $250,000 from the National Bank o,
Georgia, formerly run by the
president's friend Bert Lance.
Carter also received more than
$20,000 in royalties from his book, "Why
Not the Best?" He donated most to un-
disclosed charities .
Carter paid $91,239 in federal income
taxes on his 1978 income.
Vice President Walter Mondale, who
also released his income tax returns
yesterday, paid $25,817 in taxes on in-
come of $85,367.

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Economic trends suggest
mild recession nearing
WASHINGTON (AP) - A key gover- Rice: an economist for Data Resources
nment measure of economic trends Inc., of Cambridge, Mass., a private
dropped a record 3.3 per cent in April research organization.
and some private economists said the David Ernst, an official of Michael
nation could be nearing a mild Evans Economics Inc., said the figures
recession. are "just one more piece of
But a Commerce Department corroborative evidence that the
economist called that conjecture recession is here."
premature and said the figures "may The only positive signs were stock
indicate a healthy breathing spell. We prices and money supply.
have to wait until next month to be TRADITIONALLY, the index has
more certain," said Theodore Torda. been interpreted as forecasting a
possible recession if it declines for
THE COMMERCE Department said three consecutive months. When the
yesterday the sharp decline in the com- March figure was originally released, it
posite index of ten economic indicators was the third month of decline.
exceeded the three per cent drop in Sep- However, the Commerce Department
tember 1974, during the depths of the yesterday revised March's figure to a
last recession. 0.4 per cent increase. The index was
The department also reported that down in November, January and
orders for manufactured goods slipped February, but up in December as well
6.1 per cent in April after an average of as March.
2.3 per cent increase through the first It had declined for 12 consecutive
three months of the year. It was the months during the 1974-75 recession.
largest drop in ten years. The index in April stood at 138.7,
The April decline in the composite in- compared to 143.5 in March. The base
dex was the fourth in the last six mon- year is 1967.
ths and comes at a time when many The Commerce Department said the
private economists are predicting a slump in factory orders and shipments
mild recession during the last half of for April affected virtually every in-
1979. dustry, but particularly durable goods
"WE ARE SEEING the beginnings of manufacturers, -including steel mills
that mild recession," said Douglas and auto plants.


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