0 4 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 Sr.. - 4 4 1*Ei SOERSI TRAVE he Best Travel Costs YoL Nothing! BUSINESS HOURS: Mon.-Fri. 9:00-5 Sat. 9:00-12:00 14 Nickels Arcade-f 994-6200 12 Nickels Arcade-int 994-6204 ) -.* VAV A dv i e ..r..,.. 5:30 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 University year at 420 Maynard Street, Ann Arbor, Michigan, 48109. Sub- scription rates: $13 September through April (2 semesters) : $14 by mail out- side Ann Arbor. Summer session published Tuesday through Saturday mor- nings. Subscription diates: $7.50 in Ann Arbor; $8 by mail outside Ann Arbor. Second class postage paid at Ann Arbor, Michigan. POSTMASTER: Send address changes to THE MICHIGAN DAILY 420 Maynard Street, Ann Ar- bor, MI. 48109. The Michigan Daily is a member of the Associated Press and subscribes to United Press International, Pacific News Service, Los Angeles Times Syn- dicate and Field Enterprises Newspaper Syndicate. News room (313) 764-0552, 76-DAILY. Sports desk, 763-037; Circulation, 764-0558; Classified Advertising, 764-0554: Billing, 764-0550. 0 VI a I 'IS' At TRW it's what we're all about. We've created an environment encouraging people like you to define and go after your individual professional goals. So when you work with us, you'll get a personalized approach to your technical growth. An approach that includes .. . An informal atmosphere that encourages insightful thinking. Co-workers who value the free interchange of ideas. Responsive managers who look out for your advancement. 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