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Page 2-Friday, January 28, 1983-The Michigan Daily
Reagan may give on surcharge
WASHINGTON (AP) - The Reagan
t Administration may back away from
its proposal for a standby 1 percent sur-
charge on taxable income because, of-
ficials say, it could prove unfair to
lower-income Americans.
The administration may ask instead
for a 5 percent surcharge on tax
liability-rather than a levy directly on
income. Neither proposal would take
hold before Oct. 1, 1985.
THE INCOME SURCHARGE had
been a leading candidate for inclusion
in a package of contingency taxes
President Rieagan wants for fiscal
years 1986 through 1988, if needed to
reduce future budget deficits..
That package, as originally outlined,
would raise $45 billion a year by corn--
.bining the surcharge with a fee on
crude oil that would raise retail gasoline
prices by about 12 cents a gallon.
However, in the wake of
congressional protests that a flat in-
come surcharge would burden those in
the lower brackets, administration of-
ficials said yesterday they are thinking
of proposing, instead, a 5 percent sur-
charge on tax liability. That would
place a heavier share on upper-income
taxpayers while still raising about the
same amount of revenue, roughly $20
billion a year.
"WE ARE CONSIDERING two op-
tions: a 1 percent surcharge on taxable
income and a 5 percent surcharge on
taxes paid," Treasury Department
spokesman Marlin Fitzwater said.
"We're interested in the 5 percent
surcharge because it is more fair," Fit-
zwater said. "It has a greater impact
on the upper tax brackets and less im-
pact on the lower brackets, and maybe
is a . . .better way."
Fitzwater added that Treasury tax
experts still were looking at the
proposals and no final decision has been
made yet on what type of surcharge to
propose.
"WE STILL COULD go either way,"
he said. "The benchmark is what is
most fair."
Several administration officials said
a firm decision on the type of surcharge
had never been made, either by
Treasury Secretary Donald Regan or
by the president.
However, when the idea of an income
tax surcharge first was proposed to the
president, it was described only as a 1
percent surcharge on taxable income,
said the officials, who spoke only on
condition that their names not be used.
BOTH REPUBLICANS AND
Democrats in Congress have criticized
a surcharge on taxable income as being
"regressive."
Calculations based on tax rates in ef-
fect as of 1984 show that a 1 percent sur-
charge on taxable income amounts to a
12 percent increase in taxes for a family
IN BRIEF
Compiled from Associated Press and
United Press international reports
Reagan's arms control nomnee
not sure Soviets follow Salt II-
WASHINGTON - President Reagan's arms control nominee told critical
senators yesterday he does not know whether the Soviet Union is violating
the unratified Salt II treaty, which the Soviets and the United States have
pledged to obey.
The statement by Kenneth Adelman prompted a sharp response from
Democrats and Republicans on the Senate Foreign Relations Committee
who questioned the 36-year-old nominee at a confirmation hearing.
Adelman, deputy to U.N. ambassador Jeane Kirkpatrick for the past two
years, was named to succeed Eugene Rostow as director of the Arms Control
and Disarmament Agency.
Rostow resigned Jan. 12 at Reagan's request, charging tht elements within
the administration and in Congress were trying to undermine his agency's
efforts to negotiate arms reductions.
"I am surprised you do not have a view as to whether the Soveits are
cheating or not cheating," Sen. Alan Cranston, (D-Calif.) told Adelman.
cranston announced he would vote against Adelman just as he had opposed
rostow's nomination in June 1981.
Reagan
... proposes tax surcharge
with a taxable income of $10,000 a year,
but only a 3 percent tax increase for a
family with $100,000 in taxable income.
Vic,, 7-- --.-- -Vie
Officials encouraged by
plan for smaller 'U' cut
Jobless benefits lowest since July
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Domestic
ernotional
(continued from Page 1)
did pay attention to what we had to say
about the impact the Crisis Commit-
tee's recommendation would have on
higher education."
IN LANSING, House Majority
Leader Gary Owen (D- Ypsilanti) said
he generally agreed with Blanchard's
approach to cutting the budget.
"Personally, I think we don't need
any more cuts from higher education,
but because , of (the state's fiscal)
problems, something has to be done,"
he said. "I only hope (the cuts) can be
kept to the minimum the governor has
recommended."
Blanchard Wednesday night unveiled
his plan to shrink the state's ballooning
deficit. That plan included a 1.75 per-
cent income tax hike and $225 million in
budget cuts.
THE BLANCHARD program carves
$60 million out of the Department of
Social Services budget and takes $52
million away from' colleges, com-
munity colleges and local schools. The
total amount of cuts and a proposal to
boost the income tax from 4.6 percent to
6.35 percent were unveiled in the
Governor's State of the State address
Wednesday night.
Savings realized from program and
board eliminations range from $8,000
for the Agriculture Department's
gasohol promotion effort to $1.1 million
for the crime victim's board.
Some of the moves will require
legislative approval, while others can
be accomplished through executive
action. A spokesman declined to reveal
how the administration will proceed, on
a case-by-case basis, saying "we may
starve some of them to death" by shut-
ting off funding.
IT IS EXPECTED that the cutbacks
will result in some layoffs, although no
precise estimate was available.
Elimination of the crime victims'
program, in particular, will likely
prove highly controversial in the
Legislature.
A background sheet said the crime
victim's board aids each year about
1,000 people physically injured during
violent crimes. But it said 70 percent of
the money eventually goes to doctors
and other care providers and 25 percent
for burial costs covered by other public
programs.
OFFICIALS AT the board cold not
immediately be reached for comment.
Spokesmen for the Secretary of
State's office said the 14 branch offices
to be eliminated - at a savings of only
$70,000 - have not yet been selected.
Previous reviews of the' 180 offices,
however, have produced a "candidates'
"pool" based on volume of business han-
dled, cost of operation and other fac-
tors. Offices to be axed will be picked
from that pool.
WASHINGTON -The number of American workers receiving regular
state unemployment benefits dropped below the 4 million mark for the first
time since last July, the Labor Department reported yesterday.
At the same time, the department's Employment and Training Ad-
ministration said new claims for benefits plummeted to 491,000,- the lowest
point in 16 months -during the week ended Jan. 15.
Despite the apparent good news, economists were not ready to forecast
any long-term significance to the data.
"I fear it is still not an indication that unemployment will go down," said
Jerry Jasinowski, economists for the National Association of Manufac-
turers. "While it may go down in January, I still think unemployment will
break the 11 percent level."
Jasinowski noted the unemployment benefit statistics can be misleading,
fbecause they do not include unemployed persons who have exhausted their
benefits.
Geneva arms talks resume
GENEVA, Switzerland - U.S. and Soviet arms negotiators yesterday re-
sumed year-old talks on reducing the number of medium-range nuclear
missiles in Europe and a western leader warned Moscow to stop trying to
divide the NATO alliance.
U.S. arms control negotiator Paul Nitze met for three hours with Soviet 1
negotiator Vuli Kvitsinsky, in talks put under pressure by the late 1983
deadline for deployment of 572 U.S. cruise and Persing-2 missiles inEurope.
The talks resumed after a two-month Christmas recess. Maintaining the
news blackput agreed to when the talks began Nov. 30, 1981, both sides issued
a brief statement saying they would meet again next Tuesday.
But West German Defense Minister Manfred Woerner said after a break-
fast meeting with Nitze, that Soviet proposals represent an attempt "to un-
couple the United States from Europe."
He said Moscow has to take into account that West Germany and other
- Western European nations "live under American nuclear protection." The
West may be ready for a compromise on numbers, he said, but not one giving
Moscow a nuclear "monopoly."
Congressional cocaine dealers,
in Australia:for etraditio n
PERTH, Australia - Two Americans wanted for allegedly peddling cocaine
in Congress, were ordered held yesterday on charges of forging Australian
passports and face possible extradition to the United States.
Douglas Wayne Marshall, 27, of Washington, D.C. and Troy Mitchell Todd,
23 of Potomac, Md., pleaded not guilty to the forgery charges in a court in the
western city of Perth but were ordered held in custody until Feb. 3.
Prosecutor Sean O'Sullivan told the court passports and airline tickets
were found in the possession of the men when a federal and state police force
raided a house in the Perth suburb of Beckenham Wednesday.
The two men had jumped $1 million bail in the United States, where they
had been indicted for trafficking large amounts of cocaine, he said.
The prosecutor said Marshall and Todd should be extradited to the United
States to face the drug trafficking charge.
Storm hits Calif. shore with
hurricane winds, 30-ft. waves1
The third storm in a chain blamed for nine deaths this week pounded Cali-
fornia with hurricane-force winds, driving rains and 30-foot waves again
yesterday, toppling houses into the sea, washing out roads and forcing hun-
dreds to flee flooded homes.
"I knew it was all over when I saw the hot tub sail by into the ocean," said
Becky Ilagan, who fled from her Malibu home just before it broke up in the
boiling high tide.
At least 100,000 homes lost power as the storm, which first hit the coast
Wednesday, pushed across the Golden Gate state to the Rockies.
The pounding surf destroyed beachfront buildings, collapsed piers and
wrecked boats from the Oregon border to Mexico. Water was waist deep in
many homes. Mudslides tumbled off hills and rivers rose out of their banks.
"It's a nasty one," said Harry Gordon of the government's Severe Storms
Forecast Center in Kansas City, Mo., and forecasters offered little respite.
Vol. XCIII, No. 97
Friday, January 28, 1983
The Michigan Daily is ea ted and managed by students at The University
of Michigan. Published daily Tuesday through Sunday mornings during the
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