Masonry Magazine June 1972 Page. 29
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Substantial income tax increases may be in the cards for next year, despite the Nixon Administration's insistence that no boost will be needed. The present tax system isn't generating enough revenue to cover spending increases projected for 1973 and beyond. Without a tax hike, Washington would keep running an inflationary deficit in time of general prosperity.
The White House doesn't like speculation about a big tax increase in an election year. Officials have taken great pains to squelch reports that a boost is inevitable in 1973. They say Federal spending will be reduced enough by the President to make a income tax increase unneeded.
But no President has been very successful in cutting Federal spending. Once a program is enacted, it has a momentum of its own. And even if the President proposes reductions, Congress is usually reluctant to accept them. In fact, there has been a sharp increase in Federal civilian programs in recent years and there is no reason to think this expansion won't continue.
A quick end to the Vietnam war wouldn't make much room in the budget. And recently-negotiated agreements to limit the deployment of nuclear weapons won't lower defense costs. The mere $1.4 billion that seems likely to be the savings on cut-back missile defense systems will be more than offset by the replacement of military hardware Pentagon officials want.
An increase in income tax rates is the most likely option next year. Or, to give a temporary flavor of the increase, the President might ask for a surcharge on top of the present rates. In addition, a value-added tax can not be ruled out. Even the White House holds open this possibility, saying it would substitute for increases in local property taxes. On top of this, Congress will be considering another set of major reforms to the tax system.
The Internal Revenue Service is stepping up its efforts to uncover tax fraud in businesses. It is developing an in-depth tax audit designed to increase effectiveness in uncovering tax avoidance and evasion schemes. IRS will concentrate on methods that enrich key employees at the expense of the company, illegal corporate contributions to political campaigns and the schemes of officers or employees to benefit themselves through the company.
IRS is also studying new, faster ways of examining needed corporate records. Some firms are using delaying tactics-taking a year or more to provide readily available records.
Tax credits are available to businesses that hire welfare recipients. The incentive was set under a little-noticed section of the 1971 tax bill. It applies to wages paid persons hired under the Work Incentive Program. All employers can claim a dollar-for-dollar credit on their income taxes-up to 20% of wages paid a Program employee for his first 12 months of work. After July 1. as many as 1.5 million welfare recipients will turn eligible.
Firms interested in hiring under this program should contact the local office of their State Employment Service. It will refer applicants and certify eligibility for the tax credit. In a typical case, the plan could reduce taxes $1.000 a man.
The Labor Department has struck a sharp blow to the 4-day workweek. It rejected an appeal to permit a 10-hour day without payment of overtime-a legal change in the wage-hour law sought by proponents of a 4-day week. They wanted to extend the 8 hour day to 10 hours before overtime was paid. Many small companies are anxious to convert to the 4-day, 40-hour workweek.
But the AFL-CIO strongly opposed the change in the overtime provision, claiming it would circumvent the wage standards.
TV maker and retailer record-keeping will be eased by the government. The Food and Drug Administration will relax exemptions from radiation rules. Currently, records of television buyers must be maintained for five years. This permits tracing of products in case radiation hazards are discovered. The present requirements were necessary when TVs used mostly vacuum tubes. But they are not required now that manufacturers build solid-state TV sets.
However, before the rule is relaxed, FDA plans to inspect makers plants with emphasis on quality control and testing operations. FDA wants to check protection against radiation.
The Federal Trade Commission may alter its truth-in-advertising drive. FTC has been requiring some firms to substantiate their advertising claims. But the Commission now finds that the program has had only limited success. The information is either of doubtful adequacy or too technical, FTC believes. It was submitted by manufacturers of automobiles, air conditioners, electric shavers and television sets. Some 32 corporations filed the information.
The program in progress will be continued through the rest of 1972. But the Commission may make some