Masonry Magazine August 1972 Page. 28
Washington Wire
(Continued from page, 29)
MCGOVERN IS TOTALLY COMMITTED TO INCOME REDISTRIBUTION and tax reform, even though the exact details of the program remain in a state of confusion. Income would be shifted to poorer families through tax credits and reforms. A tax credit would replace the $750 now allowed as personal tax exemptions. It would aid those families with incomes up to $20,000, but not those above. An early McGovern plan would have raised taxes for each family over $12,000.
McGovern would tighten depreciation rules for new plant and equipment. Nixon's 1971 depreciation speedup would be axed. So would some of the accelerated depreciation put into effect by President Kennedy. Corporate taxes would also be hiked to help offset the costs of the plan. The bite on profits would lift tax revenues by some $14 billion-to $50 billion.
MCGOVERN WOULD PUSH FOR COMPREHENSIVE TAX REFORM legislation on 1973. The 7% investment tax credit would be eliminated or modified substantially. McGovern wants it used as a counter-cyclical device-a flexible fiscal tool. The rate would be raised to foster investment in recessions, cut it in booms. The oil and mineral-depletion allowance would be cut sharply or eliminated.
Tax breaks available to individuals would be trimmed by the Democratic nominee, too. Capital gains would be a target. He wants the capital gains rate raised from 35% to about 48%.
SOME TAX REFORM SEEMS LIKELY IN 1973 even if Mr. Nixon wins again. A strong voter response to McGovern's appeals for reform has had its impact. It led the President to promise his own reform proposals before 1972 is over. Law-makers agree that reform could be a major activity of the new Congress.
But Nixon's reform proposals are expected to be mild. His advisers keep stressing the significant tax changes that have taken place over the last 21/2 years-changes that have still not been fully appraised and analyzed by officials.
DEFENSE SPENDING WOULD BE SLASHED BY OVER $30 billion under McGovern. The cuts wouldn't be made all at once; they'd be phased in over five years. Some of the reductions would be accomplished by cutting U.S. forces abroad. But most would come by trimming or eliminating a range of weapons systems. The reductions would be tied to spending to create jobs for the displaced. Workers in defense plants would get 80% of former salary while retraining.
IN THINKING ABOUT MCGOVERN, BUSINESS MIGHT CONSIDER these questions: (They might find the answers somewhat reassuring, when they stop to ponder.) Would McGovern's economic plans be adopted, even if he won the Presidency? If elected, how hard will the Democratic nominee push for all his programs?
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masonry • August, 1972