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July 26, 1980 - Image 9

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Publication:
Michigan Daily, 1980-07-26

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The Michigan Daily-Saturday, July 26, 1980-Page 9

Noted GOP
economist calls
tax cut an
unwise move

From AP and UPI
WASHINGTON - Herbert Stein, who
was chief economic adviser to the
Nixon administration, broke with the
Republican platform yesterday and
said it would be unwise to approve a tax
cut now.
"Tax reduction at this stage is likely
to confirm the common impression that
the government will not stick with its
anti-inflation effort long enough to suc-
ceed," Stein told the Senate Finance
Committee.
"THE RESULT would be to set the
stage for another wave of inflation," he
said.
Stein's arguments were supported by
Irving Shapiro, chairman of Du Pont
Co., who testified before the House
Ways and Means Committee. He said
Congress should wait until after the
election to decide on a tax cut.
"A hastily improvised effort to cut
taxes in the heat of an election year
recession would result in reduced
buying power for all Americans while
promising the opposite," Shapiro said.
"IT IS A cruel hoax to give citizens a
tax cut without taking steps to tamp
down inflation," he said.
But two other business leaders asked
the committee to write a tax cut now so
it could go into effect next Jan. 1.
Donald Regan, chairman of Merrill
Lynch & Co. Inc., rejected arguments
by the Carter administration that any
such tax-cutting now would throw the
federal budget even further out of
balance and threaten gains already
made against inflation.
THE ECONOMY clearly can tolerate
a tax cut near the bottom of a recession
"if it is accompanied by a program of
cutting federal spending," Regan said.
Donald Seibert, chairman of J.C.
5 Penney Co. Inc., told the Ways and

Means Committee: "No purpose is ser-
ved by postponement of the inevitable
necessity to at least partly offset the
enormous implicit increase in tax bur-
dens as the result of inflation since
1978 ...
"Fundamental reasons for a major
reduction in tax burdens will definitely
not go away between now and next
January."
THE CARTER administration has
taken no stand on whether a tax cut
should be passed next year. But
President Carter and his advisers insist
any vote this year to reduce taxes in the
future likely would set off a new round
of inflation.
The Republican platform calls for
tax-cutting action this year, and GOP
presidential nominee Ronald Reagan
and his congressional supporters are
pressing for immediate passage of a $36
billion tax cut to take effect next year.
Stein, now associated with the
University of Virginia, dismissed the
Republicans' contention that a tax cut
would generate so much more
economic activity - and thus more
taxes - that it would pay for itself.
He also said national security might
be threatened by a premature tax cut.
The great danger, he said, is that
Congress would be reluctant to expand
the federal deficit or to make up for the
revenue lost in a tax cut by reducing
non-defense spending - and that defen-
se spending would bear the brunt.
Senate Finance chairman Russell
Long (D-La.), said "at least half" of
any tax cut should go to stimulate more
savings, investment and productivity.
Long said a tax propsal being
developed by a Senate Democratic task
force may be unveiled slightly later
than originally planned, in very early
September.

No matches, lighters, or other
open flame of any type.

Fri
Sat
12:00
(R)*

Turn-out light in first
week o registration
z Continued from Page 3)
vice Office in Washington, D.C. would have been ended by now," said
WITH THE 'STAGGERED' high school graduate Joe Hatley, who
registration system, 20-year-olds born will be a freshperson at the University
in the first three months of the year in the fall. "I thought about not
registered Monday, those born in the registering, but that $10,000 fine stop-
second quarter signed up Tuesday, ped me." Hatley's card included a line
those with third quarter birthdates reading, "I am registering under pro-
registered Wednesday, and those born test.'
in the last quarter of the year "I don't feel I have any choice," said
registered Thursday. Yesterday and University physics major Mike Kuiper.
today were set aside for those who did "I may someday try to get a job in
not register earlier in the week. Sign up Europe, and if I go anywhere, they
for males born in 1961 begins Monday, would probably look over my record to
July 28. see whether I registered." Kuiper was
Some of those registering today at the holding a "Registering under protest"
Liberty St. post office were doing so un- sticker.
der protest. "I was hoping registration

N CONCERT AND BEYOND
Fri
Sat
12:00
(PG)
TnsoC MiNrmse

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