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Show 3 THE VOICE OF BUSINESS t i' A ?ale otf iwo flax cufls t: By Richard L. Lesher, Pres., Chamber of Commerce of the United States After a stunning defeat in its drive to derail the Reagan budget cuts, the House leadership is now busy at work to thwart the Administration's tax proposals. Central Cen-tral to its strategy is an attempt to divide and conquer the business community by producing a package of tax goodies designed to lure small businesses away from their solid support of the President's economic recovery program. Will it work? I am convinced that as the business community examines the two competing tax plans side-by -side, it w ill stay solidly behind the Reagan program. Despite some adjustments deemed necessary to win over conservative ' Democrats, the President hasn't budged on his commitment to reduce individual tax rates across-the-board over three years. A 25 percent cut would provide every American w ith greater incentive to work, save and invest. It would also encourage en-courage some "underground'' economic activity upon which he currently does not pay tax to come to the surface where it would be taxed. This proposal would improve the economic climate for business by increasing increas-ing worker productivity and generating new savings which would then be available for business investments. More specifically, it would provide major relief to the nearly 90 percent of businesses, mainly small businesses, who pay their taxes at steeply graduated personal rates. The President also proposes to accelerate ac-celerate and simplify depreciation schedules for plants and equipment in order to encourage new investment and greater productivity. While it has been charged that this proposal would not be of any great consequence to smaller businesses, the facts show otherwise. In 1975, the latest year for which such figures are available, small businesses with total assets of less than $5 million claimed 40 percent of the total depreciation deprecia-tion for all businesses. Clearly, this proposal, pro-posal, along with vastly reduced estate and gift taxes, a new tax credit for research and development, and other measures would benefit the entire business community. The alternative package, a product of House leadership and the majority of Ways and Means Committee, offers Americans a two year tax cut of 15 percent. per-cent. A third year cut, they insist, will have to wait because it is impossible to predict now whether economic conditions in 1984 would warrant it. To attract business support, this package includes an "expensing" provision provi-sion which, after a 10 year phase-in period, would allow businesses a one-year w nte-off of investments The alternative plan also calls for a reduction in corporate tax rales from 46 to 34 percent to begin in 1984 and be completed by 1987. But wait a minute. How can the same folks who insist that they can't foresee w hether economic conditions in 1964 will justify a three year individual tax cut agrue at the same time for a corporate tax cut that doesn't even take effect until 1984? This built-in delay should sound alarm bells throughout the busings community, as it did to Rep Kent Hance, a Democrat w ho is co-author of the Reagan tax bill in the House. "Any corporation dumb enough to buy that idea is living in a dream world," he told a gathering of business representatives at the U S LJiamDer recency, u urrsss ic t in a budgetary pinch several w now, he warned, ranroing a r. cut would be the quickest, aaijm.. the easiest way out. r: All business people, from ti " giant corporations to thesokprr 1 of small businesses, should r c allegience to one of these two tii- 'J the most important invests f business community wiHeve t; just for ourselves but for the e&i -: As such, w e would do we3 a .- t-not t-not only the specific provisii! : ' package, but the depth of it rxnenU'oirnrnitmenttothepri-.; l prise system. i-. From the very first davof !s? ': tial campaign, Ronald Rear solemn pledge to provide rrr : and business m America rtisrj" tax relief. The House leatet; ' has supported and admired Sea ' ward Kennedy, (who, durjji: paign, promised wage and prw r t gasoline rationing, moreref-i'. ' higher taxes), only recesLH reluctantly began its flirtitiir: E cut. The President has fomiuU: '. package in the context of i kc;- f" sive. coherent economic prop: addresses all the ills of our tccor c all the excesses of our governs n House leadership's plan, bcr K dividual) attractive some fn-" 1 be, is the product of i phiksopt? '' gasping its last breaths, and hiti: ing vtcum. grabbing on to anyiA afloat. Business, like all Amenas have only one choice-the Reip" tisan tax relief package. W |