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September 12, 1984 - Image 2

Resource type:
The Michigan Daily, 1984-09-12

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Page 2-- The Michigan Daily - Wednesday, September 12, 1984

U.S. business sets 18 year record

WASHINGTON (AP) - U.S. businesses are plan-
ning to spend a record $307.6 billion on modernization
and expansion in 1984, the government reported
yesterday. The increase, after adjusting for in-
flation, would mark the biggest surge in capital spen-
ding in 18 years.
The Reagan administration, which credits its
business tax cuts for much of the strength, hailed the
news. Economists agreed it showed the country was
in a remarkable capital spending boom.
THE COMMERCE Department found in a survey,
taken'in July and August, that businesses plan to
spend 14.3 percent more on building and expanding
plants and buying new equipment than they did in
1983. With inflation, the increase translates to 13.3

percent for 1984.
If the plan becomes reality, then growth would be
the strongest since a 15.2 percent surge, after ad-
justing for inflation, in 1966. The new survey was
down slightly from one in April and May that found
businesses expecting to increase capital spending by
14.8 percent in 1984. A January-February survey had
put the increase at 12.6 percent.
Most economists discounted the slight drop from
the April-May survey, saying that 13.3 percent
growth would still be remarkable. Capital spending
declined 3.6 percent in 1983 after an even steeper 6.3
percent drop in 1982, when the country was in
"DESPITE THE downward revision, all in-

dications suggest that business plant and equipment
spending will remain the main force behind the ex-
pansion for the next six months to a year," said Allen
Sinai, chief economist for Shearson Lehman-
American Express.
Commerce Secretary Malcolm Baldrige said the
surge in invesment was adding to capacity at the
nation's factories and playing a big part in improved
productivity, which has registered its longest string
of increases in a decade.
"Decisions to expand and modernize are being
spurred by strong sales, the Reagan administration's
investment incentives and continuing confidence in
the economy's ability to grow," Baldrige said in a

Shrewd investment e

Washington (AP) - If you make the
right investments, you can earn more
than $100,000, pay no tax and get a $500
cash payment from the federal gover-
nment. And it's perfectly legal.
Norris Farnell, a Texarkana, Texas,
accountant, cited that actual case from
his files yesterday as an example of
what's wrong with the system. He

testified as the Senate Finance Com-
mittee resumed hearings on making
federal taxes fairer and simpler.
THE BEST WAY, Farnell contended,
is a national sales tax. But two other
authorities disagreed that the income
tax is so riddled with complexities that
it must be scrapped.
"A fair tax would not be simple. A

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arns tax-free
simple tax would not be fair," said Ber- everybo
nard Shapiro, who formerly was paying a
Congress' chief expert on taxes as staff Reagan
director of the Joint Committee on the entir
Taxation. He is now national director changes
of tax policy for Price Waterhouse, the Preside
accounting firm. Departn
There is so much room for im- recomm
provement, agreed David Berenson, a AMOK
partner in the Ernst & Whinney accoun- -Junk
ting firm. But he noted that nearly 40 with a fe
percent of taxpayers file short tax for- eRepe
ms, while millions more file the long ptions a
form only to itemize relatively simple rate, re
deductions, such as the mortgage in- knowna
terest. would b
"WE FEEL that much can be done rich ar
with the current income tax system to everybo
restore it to a position of being the * Modi
paradigm model for a fair, well- repealin
accepted method of raising federal keeping
revenues," Berenson said. tgage i
With $100 billion a year in taxes lost to number
cheaters and the "underground most-pu
economy," and with a record deficit sored b3
between federal avenues and expen- and Rej
ditures, many public officials are con- would t
cluding that the income tax must be rate; th
reformed from top to bottom. would b
Because of those doubts - and . *Tax
widespread public perception that is earn

dy else is getting away without
a fair share - Congress and the
administration are studying
e system with an eye to making
next year. Under orders from
nt Reagan, the Treasury
ment is due to report Dec. 1 its
nendations for change.
NG THE alternatives:
the income tax and replace it
ederal sales tax.
al most deductions and exem-
and tax everybody at the same
egardless of income. ,This is
as a flat tax. While simple, it
ring a massive tax cut for the
nd a big tax increase for
dy else.
fy the present system by-
ng most deductions - but
such popular writeoffs as mor-
nterest - and reducing the
of separate tax brackets. The
blicized plan of this type, spon-
y Sen. Bill Bradley, (D-N.J.),
p. Richard Gephardt, (D-Mo.),
ax most people at a 14 percent
he highest rate for the wealthy
e 30 percent.
what is spent rather than what
ed, exempting anything saved.

Compiled from Associated Press and
United Press international reports
Reagan offers Soviets grain
WASHINGTON - President Reagan further opened the door of the bulging
American granary yesterday so the Soviet Union - confronting another
poor harvest - can continue an unusual grain-buying spree.
Reagan told the Soviets they could buy 22 million tons of U.S. wheat and
corn for the year beginning Oct. 1, an addition of 10 million to 12 million tons
in annual purchases permitted under an agreement negotiated a year ago.
"I've said many times our philosophy is against the unfair, wrongheaded
policies of grain embargoes, and we're going to do everything we can to
strengthen markets for America's farmers," Reagan told reporters called to
a special session in the White House Cabinet Room. "They're the most
productive people, I think, on the face of the earth."
Sen. Roger Jepsen, (R-Iowa), one of the farm state leaders present for
the announcement, said later that the Soviets had not sought the increase,
but Reagan offered it unilaterally. Such sales are made through the expor-
The proposal, made in a message delivered to Moscow Monday, was
unusual - offers to sell more than the maximum sales specified by the
agreement generally are made during twice-yearly consultations.
Union sues EPA over asbestos
WASHINGTON-Calling asbestos a "killer that is stalking our schools," a
labor union brought suit yesterday to force the Environmental Protection
Agency to spell out how to correct the hazard.
Citing an agency survey showing that 15 million pupils in 31,00 schools face
the risk of breathing asbestos fibers, the Service Employees International
Union asked a federal court to order the EPA to act within 30 days.
John Sweeney, president of the 850,000-member union, said the suit was
filed only after his organization made last-minute attempts to get the EPA to
propose a regulation or standards governing asbestos removal and
specifying proper abatement procedures for school districts.
EPA spokesman Dave Ryan said "we have not seen the complaint" and
that the agency would have no immediate comment.
Asbestos contains fine fibers, which if inhaled by humans can cause a
variety of serious lung disorders, including cancer. The material was
widely used as insulation in buildings from mid-1940s to the mid-1970s.
UAW hints at contract rejection
DETROIT-United Auto Workers President Owen Bieber yesterday said a
General Motors Corp. offer on job security is a "framework" for a final plan,
but warned union members would reject the proposal in its current form.
The world's largest carmaker said its proposal-which set off exhaustive
rounds of closed-door caucuses and joint meetings after it was
delivered-would change the way it does business and protect "a significant
portion" of UAW jobs.
A current concessions contract covering 350,000 workers at the nation's
largest automaker expires Friday.
Bieber, at a news conference, said the document "does have the potential"
of becoming part of the final contract, but still contains a number of
"It just is going to take a great deal of effort and work before it's in a
saleable form. I wouldn't take this one for ratification by union members."
A number of bargainers from both sides have said the union and the com-
pany are determined to reach a settlement before the strike deadline. Bieber
said negotiations would move into around-the-clock sessions "at the first op-
Pope angers Canadian feminists
MONTREAL-Pope John Paul II, parish priest for a day to this bustling
northern metropolis, beckoned Canadians yesterday to leave the "spiritual;
desert" of the modern world and rediscover God.
"Nothing can fill the emptiness of his absence," the pontiff, wagging a
finger in the air, preached to more than 300,000 people spread out over cen-
tral Jarry Park. It was the biggest crowd ever assembled in this French-
Canadian city.
The pope, whose visit has stirred protests among feminists here, also took
note of the expanding role of women in the liberal Canadian church.
But he said nothing to alter his staunch defense of traditional church
positions against women priests, divorce, artificial contraception and abor-
Security officials had been especially concerned about the pope's stay in
Montreal, where a bombing last week that may have been connected to the
visit killed three people. No serious incidents were reported yesterday.
Iraquis shatter lull in Gulf war
s- 4
ABU DHABI, United Arab Emirates- An Iraqi warplane fired a missile
into a Liberian-registered supertanker loaded with crude oil from Iran's
Kharg Island terminal yesterday, shattering a 15-day lull in the Persian Gulf
"tanker war."
Iraq said its warplanes attacked two "naval targets" less than 24 hours af-
ter claiming to have hit a "large naval target" near Kharg Island to prove
its ability to block Iranian trade in the gulf.
But shippers and Lloyds of London were only able to confirm that the
254,520-ton Liberian-registered Saint Tobias was hit by an Iraqi missile

Tuesday after loading its holds at the Kharg Island terminal.
The missile struck a starboard ballast tank but caused only minor damage
and no injuries, shippers said.
Shippers said the supertanker was carrying 1.7 million barrels of crude
destined for Japan and, according to one shipper, "a major pollution
disaster was averted.




The MSA will be interviewing for positions for its
Budget Priorities Committee reviews, allocates and facilitates the funding of
group events and projects. The Committee meets on a regular basis monthly
and on an as needed basis.
Applications available at 3909 Michigan Union
MONDAY, SEPT. 17, 1984 - 5:00 P.M.
for further information, contact Laurie Clement or Marc Wernick, 3909 Michigan Union-763-3241





GZhj 3idhigan ai g
Vol. XVC - No.6
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