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Show IB G5KD vui;- -J REAGAN ECONOMIC PROGRAM HAS BROAD SUPPORT President Reagan's prescription for what ails the national economy has positive elements for both businessmen and investors. All in all, they have been quick to voice general satisfaction with it though they have doubts about his ability to get it enacted intact. They welcome the spending and tax cuts the President is seeking. They believe his program gives promise of a real change in direction. The number of items included in the package, however, and their wide sweep are giving rise to some skepticism. Many businessmen and investors are genuinely concerned lest the momentum that is currently in favor of the Reagan package falter. THE GOALS ARE POPULAR Within the buisness community and this includes both "big" buisness and "small" business there is broad support for the objectives that Reagan has set: Cutting the growth in federal spending; easing the tax burden for individuals as well as for business; reforming, re-forming, and paring back, the tangled web of government regulations; and establishing a consistent monetary policy. But there is awareness, too, that even the Republican-controlled Senate the President's margin is thin; and that he must depend on strong public approval to overcome the objections to many of the initiatives in his package that are already forming in the House. There is also concern that the opposition op-position in the House, using its political advantage and traditional congressional procedures that encourage en-courage the "divide and conquer" syndrome, syn-drome, may turn out to be successful in watering down the Reagan recommendations. recom-mendations. INNOVATIVE TAX PLAN Business likes the idea of a 10 percent cut in individual income tax rates in each of the next three years as proposed by the President, but an-' an-' ticipates no bonanza from this in 1981 if it should be passed in the form the White House is recommending. The reason is that Reagan has set a July 1 date for such a reduction to go into effect, and that would mean only a 5 percent tax cut for 1981. More advantage by far for the business community would come from ? pasSage'W th'e PresTdehfTpropbsal for substantially more rapid tax write-offs for 'business investment in plant and : equipment. The new depreciation 1 schedule designed to apply to property purchased after Dec. 31, 1980 would give business a $2.5-billion advantage in fiscal 1981 which ends next Sept. 30. And by fiscal 1986, the tax savings would rise to $59.3 billion. FEDERAL SPENDING AND REGULATION CUTS The reaction of business to the President's recommendations for - sharp budget cuts is, of course, mixed. Obviously, such reductions will hurt individual industries and businesses initially. It will also take some time before business reaps enough tax advantages ad-vantages to offset this loss. Yet, it appears that most businessmen are willing to take a chance that federal spending cuts will, as intended, spur private-sector activity in Time. Much more positive is the attitude of business toward the Reagan drive to curtail federal regulations and to restrict new regulations to those proved to be cost-effective and-or absolutely essential to the safety and health of the public. There is conviction that this aspect of the program will be of substantial sub-stantial help to business, and that much of it will actually be put in place. FORECAST The Reagan economic package will not be enacted intact, but over the next year and a half about 70 percent of it may well become law. Most, perhaps all, of the tax relief for business will make it this year, and great progress will be made on regulatory reform. But personal tax relief as well as budget cuts will lag the Reagan goals. |