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July 24, 1981 - Image 8

Resource type:
Michigan Daily, 1981-07-24

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Page 8 Friday, July 24, 1981 The Michigan Daily
Tax cuts screw the lower class


Ah-one, ah-two, ready steady go!
It's that time of the year in Washington, and
everybody on the Potomic is doing the Tax Cut Shuf-
fle. Take two steps to the right and three steps back-
ward, please. And be careful not to tread on the truly
RONALD REAGAN'S 25 percent solution is
perhaps the most drastic and tragic example of
man's superstitious belief in corporate America.
Presumably, the across-the-board cut will "stimulate
growth" in the economy by putting more money into

By Fred Schill
porate America will choose to hedge its bets. In short,
that extra money will end up in the bank rather than
in the pockets of the currently unemployed.
Meanwhile, those unemployed masses will con-
tinue to suffer, their misery only aggravated by the
tax cuts. You see, that glorious 25 percent cut, by its
across-the-board nature, will return large sums of
money to those whom already have plenty. Only a

The Left andRight fight.
Round 2

year, will receive a $27 dollar tax cut. In return, food
stamp and welfare benefits are being dashed because
many recipients are not "truly needy."
Aid to Dependent Children support is being gutted,
a terrible blow to the most vulnerable of poor
people-children. Social Security benefits-which
are most needed by the most impoverished-are
being cut back. All in the name of refunding taxes and
stimulating economic growth-in the hope that,
maybe, inflation and unemployment will ease.
SUPPLY-SIDE economics, Reagan calls it.
Voodoo economics, his vice president called it, when
he was running against Ronny and not yet a devoted
yes man. It is a policy that dismays our allies, by con-
straining their own markets with sky-high interest
rates, and causes deep resentment in many sectors of
American society: within the victimized social
programs, the lower classes, the peace-loving doves.
As we begin the period of Wait and See in this
pathetic Tax Cut Shuffle, we ask ourselves, "Is it all
worth the social turmoil?" Hardly.
The stupidity of the supple-side approach was heat
captured in a recent Doonesbury comic strip. After
explaining the twisted logic to Mark, in a radio inter-
view for his campus station, a spokesman for the
supply-siders asked him, "Now, with that $27 in your
hand, what would you do with it?"
"I don't know, dinner and a movie?" is Mark's
honest response.
"No, no, wrong psychology," the spokesman says,
"You'd invest ina steel mill!"
Of course. Hippity hop.


the private sector, and out of the federal government.
The savings we would all enjoy, or so goes the logic,
would be pumped back into the economy. Investmen-
ts would soar, new businesses would emerge. Unem-
ployment would plummet while inflation would ease.
One, two, one two three. Isn't this fun?
It does not seem to have occurred to anyone that,
even if business is stimulated by investments, the
private sector might very well put the extra money in
its corporate pocket. Indeed, given the uncertain
economic climate and the failure of business from
Joe's Garage to Chrysler, it is very likely that cor-

small fraction of the cuts will go to those making less
than $15,000 a year.
CURRENTLY, the have-nots will be feeding the
theoretical growth of industry and further enrich-
ment of the rich with their own vital resources. That
25 percent cut will result in a leaner federal budget.
Since it is necessary to spend larger sums in order to
more effectively decimate the Reds (and bankroll the
defense industry), the reductions wraught by the tax
cuts must come from social programs. Swing your
partner 'round and 'round.
So the family of four, struggling along on $10,000 a


The Michigan Daily
Vol. XCI, No. 47-S
Ninety Years of Editorial Freedom
Edited and managed by students
at the University of Michigan
Renew Voting
Rights Act
THE STORM IS approaching, and it's
time to get ready.
With the 1965 Voting Rights Act approaching
its expiration date early next year,
preparations must begin to ensure that it will
be renewed. Thus far, the Reagan ad-
ministration-with the backing of Sen. Strom
Thurmond and Sen. Jesse Helms-has ex-
pressed doubts that this will happen.
The act, which provides for easier access to
the polls for minorities, has thus far been an
unqualified success. Before 1965, state and
local governments could arbitrarily place
restrictions on voting.
Since 1965, more than 1.5 million Southern
blacks have registered to vote. In specific
towns, counties, and states, political par-
ticipation has increased greatly.
Thurmond and Helms, both representing
Southern statesoppose the act, regarding it as
federal encroachment in a local matter.
President Reagan should think twice about
this view, consider those of the countless
others in Washington who disagree, and see
that the act is renewed quickly, with minimal
storm damage.


Tax cuts are proper means
of redistributing wealth

It is interesting that Congress
passed the Reagan budget figure
quickly, but is mired in its attem-
pt to formulate a tax cut bill. It
must be easier to decide how to
spend other people's money than
it is to decide how much to rob
them of.
The Kemp-Roth tax cut bill has
been in the news. for quite a
while now, but since the
President has embraced the
proposal, critics have been
gleefully ripping it and invent-
ing better ways to cut taxes.
Their arguments have more
holes in them than a doughnut
Kemp, and Phillip Roth advocate
the bill because everybody will
benefit equally, with an added
boost to the economy.
A central point of controversy
is the permanent reduction in
potential federal income for three
years. Realizing that federal
spending, now out of control,
must be cut off at the source, a
reduction in federal income is a
decided advantage.
It is a second point that has
gained the most attention and has
been subjected to the most distor-
tion. Because the proposed tax
cut would be proportional to in-
come in the first place, the
benefits would also be propor-
tional. The argument that the
rich will get more back than the

By Mark Gindin
poor is obvious, but not a cause
for alarm.
THE WELL-OFF will of course
get more money back, they put
more money in to begin with. But
they only get back a quarter of
what they put in, just like
everyone else. To say they
shouldn't get as much money
back as poorer people raises a
different argument.
The question arises as to who
deser.ves the money. "Why.
should the wage-earners keep all
their earnings? The poor need it
more," is a familiar battle cry-a
cry that is sickening. The
Democratic "alternative" is
molded with the cry in mind. The
battle cry is along the lines of the
progressive income tax.
First of all, the people with
money are the ones who invest
and save it. This is undeniable,
even by a Democrat. By in-
vesting and saving, the money is
used to enlarge the economic pie.
Again undeniable.
from a larger pie from which to
cut slices, and by the previous
calculation, the Reagan tax cut
would enlarge the pie. The
"alternative" will reduce the pie
development in the name of
equality, also used as
justification for "from each ac-
cording to his ability, to each ac-
cording to his need," the famous
socialist theory.
Socialism enters the picture

under the progressive income tax
and the Democratic "alter-
native," whether they admit it or
not. By targeting cuts, they will
effectively give money to those
who did not earn it. Hut that's
OK, everybody will be equal.
What better way to make a
nation of individuals into a
society of equals. As Karl Marx
said, the first step toward a
utopian state was "a heavy
progressive or graduated income
The tax burden increased 80
percent during the Carter ad-
ministration and is still rising due
to the windfall profits tax, the
yearly Social Security tax in-
creases, and the well-publicized
bracket-creep, whereby wage
earners are pushed into higher
tax brackets by inflation.
Any move to cut taxes in-
creases the economic pie. There
is more pie for everybody. Twen-
ty five percent across-the-board
wouldbe the fairest plan of all.
The Democratic alternative is
only a political game in the name
of social equality, played by
ideologues in their quest for more
justice for some. And they soun-
ded so sincere, too.
Fred Schill and Mark Gin-
din go at each other every
Friday on this page.




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