Show u S falling short in econom economic IC progress The United States has been falling behind other major industrial nations In economic progress and this decline has resulted In us products being less com com- competitive in the world marketplace This was th the conclusion presented by Utah Foundation the private research agen agen- agency cy in their latest study of restoring economic growth In the US The report attributes the US decline to 1 a tax system that favors consumption consumption tion and penalizes savings and production tion 2 governmental policies that discourage rather than encourage private economic endeavor 3 ex ex- ex excessive governmental borrowing that has tended to crowd out private bor bor- bor borrowing rowing needed to refurbish American in- in industry industry and 4 emphasis on redistributing income rather than seek seek- seekIng seeking Ing to enlarge the total economic base According to the study corporate pro pro- profits profits fits as a percentage of gross domestic product have declined markedly during the past decade This decline has made It difficult to meet the challenge of modernizing and expanding the stock of capital capita machinery Profits are Important not only as a source of funds for reinvest reinvest- reinvestment reinvestment ment in the corporate business but also as a means of attracting new capital Investments In addition to the decline in relative corporate profits tax levels in the US have risen steadily steadly over the past three decades Governmental receipts as a percentage of the gross national product has climbed from in 1950 to in 1981 While this growing tax burden is im- im important important Foundation analysts claim that an ever greater deterrent to the nations nation's industrial growth has been the tax lax structure structure ture Itself The report indicates that one of the major defects of the US tax system is that the bulk of the taxes are imposed against income and capital with only a relatively minor share derived ed from taxes on consumption In effect this tax system has favored consumption and penalized production The US has fallen behind most of the theother theother other major industrial nations of the world In the proportion of its resources devoted to new capital investments This in turn has resulted in a slowdown in the a average productivity gain and has led to Increased inflation and growing unemployment Another factor cited in the report as a factor In the slow economic progress In Inthe inthe the US during recent years is the grow grow- growIng growing Ing role of transfer payments welfare unemployment benefits social security food stamps medicare etc Such transfer payments have grown from 15 billion In 1930 to billion in 1981 and an estimated billion in 1982 with most of the increase ase coming within the past fifteen years The study notes that transfer payments represent a reallocation of available economic resources by govern govern- government government ment and do not raise the overall economic base The uncontrolled expansion expansion sion of such payments during recent years may be threatening the economic base on which they depend for support Foundation analysts indicate that the Economic Recovery Tax Act passed by Congress last year was designed to cor- cor correct correct some of the past abuses to the na- na nation's nation's tion's economic system and to encourage sa savings and stimulate new Investments However because of the serious economic recession now being ex- ex experienced experienced it is too early to evaluate what the term long effects of the Act will be beon beon on restoring economic growth In the US |