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Show Albs COTt by Senator Orrin Hatch Indexing cuts tax burdens One of the best remembered lines in erican policitics - outside of Amy Carter's views on nuclear poliferation, Perhaps - is the question Ronald Reagon asked in his famous 1980 ate with President Carter. "Are you better off today than you ere four years ago?" he asked. A first-quarter inflation rate of vir-'"y vir-'"y zero, lower interest rates, lower growth in federal spending, ris-H ris-H housing starts and better auto 'es all point to an answer of yes, we wtter off today. But, even if all jpe things were ignored, one other eni--tax indexing -- warrants a '"ve response. Indexing prevents inflation from ing taxpayers into higher and "er tax brackets by tying tax rates me inflation rate. It stops "bracket Dm!?-' J' stoPs Ppte from being j"alzed just because their income up With inflation. Without it, as ion pushes salaries up, the 'U1ng higher tax brackets take ' any increases in real pay. Retimes, in fact, bracket creep centeses real pay; for every 1 per- 1.6 De mfIation we nave- taxes go up braTcent-In other words, because of ork reep' il is conceivable that a NucUakejh0me pay could be 'lis lav gets a raise Decause dexino Sh0Ot up 0131 much more-In" , ' 8; scheduled to go into effect in ' 1U Prevent that from happening. naCdering 1983's f'rst-quarter in-uld in-uld h"ate '4 P611- indexing "atiotui n immediate effect. The and rvT m&' outside of George wm lWn.ald Lambro, have ignored it. we need- 3S Iong as its there when soars tn !!"Wnen inflation once again late ijjVs heiShts il reached in the Inflatio', without indexing, has been the greatest boon to federal revenues since the IRS. According to the Heritage Foundation, tax rates of 30 percent were paid by only 3 percent of the taxpayers in 1960, but by 1981, over a third of American taxpayers paid those rates. A family earning the median me-dian income in 1972 paid 13 percent of that income in federal taxes. In 1980, taxes soaked up 17 percent. The increased federal revenue those higher rates rakes in is why so many big-spending members of Congress, led by Dan Rostenkowski and Tip O'Neill, want to repeal indexing. The dislike it because it leaves money with American wage-earners that they think Congress should spend instead. Ironically, wealthy taxpayers have nothing to lose if indexing is repealed. They're already in the top tax brackets. Lower-and middle-income taxpayers, the people for whom Tip O'Neill and his friends always profess so much compassion, would be hit the hardest. "Americans on the lower end of the income scale will pay dearly if Speaker Tip O'Neill and his friends in the House have their way." said columnist col-umnist Donald Lambro. "Indexing is one of the most improtant tax breaks being offered to America's low-to middle-imcome taxpayers in years." Many Utahns realize that. Surveys I conducted earlier this year in Logan, Ogden, Salt Lake, Orem and St. George showed that 70 percent of the Utahns surveyed opposed a repeal of indexing. The pro-repeal forces in Congress are hoping the public will never fully understand indexing so they won't be too upset when they take it away. But I'm hoping citizens in Utah and all across American will understand it, so they won't be able to. |