OCR Text |
Show An Editor's Notebook The Salt Lake Tribune, Sunda.v, April 2, A 17 1972 Demo s Apple Sauces5 Promise Financial Goodies, But Hold Only Sour Apples As the leading Democratic piesiden-tu- l candidates plod weatJv thioush the rows of Wisconsin fiuvie next Tuesday's primary tl e issues and die each hoping to g HV are thin ? rheioric - f undistinguished. Only Sen. close loopholes" available only to the rich and the corporations. The loope holes" most frequently cited are bonds, stock options, real estate shelters, oil depletion allowances, accelerated depreciation, the 7 percent investment credit on new' plant equipment and capital gams at death. Tax reioim is really a warmed-ove- r issue since the Tax Reform Act of 1969 ri.u reduce the allowable oil depletion rate, impose tighter restrictions on financial institutions, stock maiket investors, foundations, meiging corporations and establish a minimum tax of 10 percent on all mdriduals. Yet the effect of this law, tax-fie- George McGovern w hether one agrees with him or nas been , ot truly consistent in Its positions. The senator siated unequivocally just where they stand. lioni cully and while p.ously dLclair'-mGeorge W allace, all candidates ha1 e adopted m one form or ano'her the Wallace cry for needed tax reforms to ............. from iouih Dakota was against the Vietnam war when Hubert Humphrey and Ed Muskie were supporting President Johnson's haw Kish policies. McCovem hant w aided on busing while his rivals, other nan Gov. Geoige Wallace, have not vet I when Congress finished Pnkenng with it, was iO reduce tax revenues rather than to increase them. The quetion now arises as to whether the politically motivated tax reformers are seeking equity of treatment for all. or additional revenues for the federal solving the real revenue problem of the government. buy without the provision. As an example who would purchase bonds of financially distressed Clevelmd in preference to a sound corporate bond unless they were tax free? Thet's quite true." replies Sen. Muskie, bat I would have die tcdei.d government reimburse the states and cities for 50 peicent of the interest to keep the bonds competitive with those issued privatel.,. In other wonts, Mr. Muskie would use your tax payments to subsidize state and municipal bonds issued In any locality. Sen. William Proximre has proposed I'mted States. Let's lake a look at some of holes the politicians talk about : tl e loop- BONDS: These hands aie largely issued bv states and niutucipah ties v hose secuuties the public would not TAX-FRE- E tax-fre- e Edwin L. Dale Jr., of the New York Tm.es observes: A massive popular is based movement for fairer" taxes in part on the false assumption that a faiier tax law will give the government a lot of money quickly from the rich to be spent on things that most of us want. Mr. Dale concludes. It wont, Even a fairly severe change in the kinds of tax shelters now available from municipal bonds to real estate depreciation, will only very gradually increase fedeial revenues above what they otherwise would have teen. Tlds is not the route to ... Nicholas Von Hoffman similar legislation but would have the fedeial government pay only one third of the interest. By the fedr?l government, thev actually mean you. CAPITAL GAINS AT DEATH: Sen. Mu'hie would also impose capital gams on an estaie. An example: Under existing rules, if an individual puiuhased a shaie of stock for $1.00 that was worth $1 000 when he died and valued at $1,010 w hen sold b an heir, only the last $10 of the gam would be taxable. Mu.sLies plan would make 'lie enL. e Ji.OlO taxable. However, it is a fair assumption that the oiiginal purchaser raid income tax on his dividends ftom dir stock dunng hs lifetime, and that his holdings weie subject to substantial ovate taxes at his death. To men rdd a capital gains tax is not reform, but confiscation Such a tax wou'd weign most heavily against estates dow n. Sioik option plans are offeted as incentives to key executives and are not generally legal ded as loopholes for tax avoidance suite grins are fully taxable. REL ESTATE SHELTERS: An obvious loophole, but provisions were tightened in the Tex refoim Act of 1969. OIL DEPLETION ALLOWANCES: Credits given for exploration and drilling The oil companies say the credit is neded if the United States is to be as suied of future and ample sources of oil. Depletion Cut To Pester Little People Shot in Arm The Washington Post table distrained. There are always a few who cant be cow ed and two of them are Phil and Sue Long of 48S5 Lakeburts Lane, Bellevue, W'ash. 98006, in case you want to write and commiserate or join their struggle to find out exactly how our taxes are collected. Dread Day Hit In November, 1969, the dread day hit the Longs and they were audited. This lesulted in a disagreement between them end IRS, and that got them trying to earn what the rules are that determine f you have or have not made out your jiax return correctly. Available informa-loand there isnt much of it, suggests that either the rules are different or are diflerently applied in different piaces icross the country. E. Edward Stephens in the New York Daily News reports, for example, that n, last year in Newark, N J., taxpayers had to settle disputed, audited returns for 83 cents on the dollar while those in Manhattan could do it for 35 cents on the dollar. When the Longs w'ere audited and oegan to look into the matter, they also found that there is almost no way of nnowing if you have filled out your tax returns correctly. IRS can get you on any kind of basis if it wants to. The Longs decided theyd fight back by ittemptmg to learn what the rules and he precedents are and how they are administered. Theyve had a very roug.i go which theyve chronicled in a senes of 11 idvertisements appearing over the last several years in the Washington Post. Its cost them $4,000 but they think its woith it. Information Classified They report that almost all mforma-ho- n concerning IRS is classified. They even were told that the IRS procedures for handlmg requests under the Freedom of Information Act were confidential. Sue Long reports everything in Room 1319, the IRS public reference room, has been cleared out. The shelves themselves have been removed, the card files, everything except a guest book and a few moldy press releases. Still, from here and there, the Longs have been able to patch together some figures that raise very large doubts about how IRS goes at its work. It appears that it is the little taxpayer who is forced into massive, systematic overpayment because he lacks the money, the legal , dvice and courage to challenge his a adit assessments. U.S. Steel, It should be noted, lacks none of the aforesaid. So in 1967 the government picked up an average of $172 from more than a million small taxpayers who get audited. proHowever, where the citizen-victitested, IRS settled for 57 percent less e than it had claimed. Thats a huge on people who are described n an American Bar foundation study as more nearly resembling unsophisticated, frightened widows who know nothing about the niceties of tax law or what evidence is really helpful, assume tax expertise of anyone who works for the service, and expect that each su h employe at least has been instructed to be impartial as well as completely open and aboveboard with all citizens. And they woik to squeeze that dough out of the widows. The Longs research shows IRS puts in 437 hoirs of time to get back $100,000 from taxpayer making less than $50,000 while they can get the same amount of long green out of corporations worth over $100,000 with an of one hours uoik. over-iharg- av-eia- The previous 27.5 percent depletion to 22 percent in 1969. Sen. Muskie would reduce it further to 17.6 late was cut Spring Gives Mankind h percent, and cut by depletion allowances .or gold, copper and all other one-fift- minerals. ACCELERATED DEPRECIATION: A plan whicn allows companies to take faster depreciation such as fully depreciating in four years that which had formerly been depriciated in five years. This provision is in my judgment not only unnecessary but no great bonanza as ttie government eventually collects its money. THE TAX CREDIT: A credit given to companies on purchases of new equipment. The purpose is to stimulate business for manufacturing concerns and thus provide additional employ menl. The idea was first advanced by President John F. Kennedy for these precise purposes. As I recollect, there were no objections offered at that time by Humphrey or Muskie. Mankind needs the reawakening that is symbolic of Easter. Spring is not only invigorating, but a time of hope and WASHINGTON The Congressional Recoi d of March 21 quotes Congressman Chaiiie Vanik of Ohio as saying, In reviewing the 1971 annual report of the United States Steel Corp., I was shocked to leat n that this corporation, the 12th the larglargest American corporation est dollar value steel manufacturing carried on a company in the world total business of almost $5 billion and a net income of $154,515,754 and paid absolutely not one penny of federal income tax in 1971. Yet one more example of the integrity of our tax laws, but slowly people are coming to see how viciously unfair and chaotic they are. What gets less attention is the way these iniquitous laws are enforced, that is how the taxes are collected. In the back of everybodys mind except U.S. Steel, there is that little feeling that if you get out of line w ith these jokers, youll get your returns audited, your bank account snatched, your house foreclosed and your bed and kitchen optimism. We are now entering an era that will afford man the opportunity to ur 3 his mind, not only . to live haimomous-l- y with his environ- ment, but to vent This is a cal sequence hereof! James Keeton We Get Along Without You Very Well New York Times Service PARIS It is hard and dangerous to generalize, but there is clearly a different spirit in the capitals of Western Europe these days, and a marked. change in the atti- tude of officials here toward the United States. Paris, for example, has. never seemed more elegant and p.oud, and if it werent so - recklessly expensive, it would almost be a joy to be gypped m such suroundings. tering The glit- old buildings are scrubbed and tidy. The black clipped branches of the trees are now fringed with green, and the whole place hums with human activity. d It is not only that the cranes are poking new and higher buildings into the Paris sky, but there is an air of intellectual innovation here and in the rest of Western Europe, which seems wide-arme- Gorcns Weekly Bridge Quiz By Charles H. Goren As South vulnerable, you hold: 1 Q. VA4 AAK 832 A98653 The bidding has proceeded: more purposeful than at any time since the last world war The old political taboos are breaking down. The French are now welcoming the British into Europe, The vicious propaganda between Germany and the Soviet Union has ebbed, and there is fin-a- ll a vast pilgrimage or family reunion going on across the wall in Berlin this Easter. It is not clear yet whether Europe is building a political union looking out to the world, or an economic cartel, looking into Europe, but there is now such a flow of workers and capital from one Western European country to another, and such a network of international companies gradually integrating the commerce of these nations, that one wonders how the system could ever be disentangled for the purposes of another western war. Create Economic Network In fact, while all officials deny it, the businessmen of Europe and America, for their own selfish reasons and without any political intent, are slowly creating an economic network across the boundaries of Western Europe which may eventually compel the politicians to take common political decisions in defense of vital common even economic interests, against their will. The changing and more independent attitude toward the United States in Western Europe is more obvious and immediate than this trend toward European integration. For the quarter century since the last war, Europe has relied, reluctantly and often resentfully, on the superiority of American military and Sen-ato- is pre- Generate Revenue logi- Sen. Muskie, in advancing his proof cax reforms, says his proposals would generate S14 billion of additional revenues. Some 50 Democratic House members use a lower figure, approximately $7.5 billion, Hubert Humphrey, never one to be outdone, opines that loophole closing would save a quick $16 billion which w'ould mean a reduction in your local propercut in property ty taxes and a taxes for schools. Humphreys assumption is a complete fraud. Yet as Edwm Dale says, The $16 billion added revenue figure in the bill was taken as assured, and most of the discussion of the two senators was devoted to how it would be divided up, as if this sum could be available next Tuesday morning. It is one thing for Gov. Wallace to indulge himself in demagogic assertions about soaking the rich and reducing local taxes, but quite another for men such as Humphrey and Muskie to join the chorus of such blatant misrepresentation. Oiderly and continuing tax reform may well uc in order. But shagging for votes on this issue by making preposterous promises of the goodies to be shared by the populace is merely mouthing political pledges which can never be fulfilled. The funny thing is that George McGov-vereally believes what he is saying, but some of the Muskie and Humphrey financial oackers think their men are only kidding and giving the people what they want to hear. Will Rogers used to say: I tell you folks, all politics is apple sauce. But one of these apple saucers could be your next president. JOHN S. KNIGHT Editorial Chairman Knight Newspapers of gram because evolution it is mans capacity for reason that sets him apart from animals. Ours has been a world of might is right. Can this attitude be changed? Over the decades, man with his superior intelligence has developed weapons so destructive that no major nation can However, wliile remaining truly thankful, I have been asked to draw your attention to the ridiculous p" eras. STOCK OPTION'S: A device by which a company executive is granied a stock option at the then prevailing market puce and to be exeicised within a specific period. The executive may or may not exercise his option, laigely depending on whether the price of the stock goes up or J-r- IRS Prefers m com Dr. T. U. Van Delicti -rC',r7"X spe left by owneis of small, family business pity abroad, the magic of the American dream has lost much of its allure in Europe. British and French officials, and particularly the British, are more generous to President Nixon in his handling of the Vietnam w ihdrawal and his opening to China than his cntics at home, but Vietnam has clearly challenged the American assumption of both military and moral superiority, and convinced even our friends in Europe that maybe we dont have a superior answer to the problem of world order, and that our muddling through is not much better than Europes way in the 19th Century. Also, the internal social and political struggles in the mted States, presented to the Western European peoples by a press, radio, and television which empahsizes the violence and divisions In as our media drathe United States matized the divisions of Europe in the have made even 30s, 40s and 50s thoughtful people wonder whether we can hold together, let alone lead the world to a new and reasonable order. (Copyright) afford to start a war. The trend is to use reason or voting power to influence politicians to halt the use of bombs and other destructive devices. We realize that many countries are not ready to switch over to brain power. Easter is a wonderful time of year when Mother Earth presents her beautiful extravaganza. It is not the time to dwell on social problems and the wrongdoings of others. We are a nation that thrives on the element of novelty and thinking ahead. But we also are a melting pot of many races, colors and creeds. As individuals, we want to have confidence in the future, unity and brotherhood. However, we cannot live in peace with the world unless we learn to tolerate and respect one anothci. What we need are goals m dispel the gloom and apathy plaguing so many of us. Mans intelligence should be used to help him work out his salvation. He must also know his limitations. The wise physician knows he cannot heal all wounds or cure all diseases. He does his best to create conditions favorable to recovery. This was beautifully expressed by the great 16th Century surgeon, Ambrose Pare, who said, I dressed his wounds and God healed them. Barring the unforeseen, most of us can hve wisely, cultivate an even temperament and enjoy a modicum of happiness throughout the normal span of life. long-rang- e m economc power. As South vulnerable, Q. 2 AK6 you hold: J83 VAQ82 AQ7 The bidding has proceeded: West North . East 1 Pass Pass A South ? riority, was respected. What do you bid? Neither vulnerable, as South you Q. 3 hold: VAK754 AQ752 4K10 93 The bidding has proceeded: Neither vulnerable, partner opens Q. 4 with one spade and you hoid: 462 J74 VAQ95 What is your response? Q. 5 Both vulnerable, as South you AKJ74 hold A A3 V A 107 QJ4 The bidding has proceeded: South North East Pass Pass 1 Z QJ972 West Pavs 2 A . ? What do you bid now ? as South Q. 6 Both vulnerable, hold you : VS4 AJ973 4AK8 The bidding has proceeded: North South West 1 Pass I A 2 A Pass 2 NT ? What do you biu now? (Ixiok for answers Monday) jK $.'' American nuclear power was its shield. The almighty dollar was its reserve currency. The American leadership in scientific innovation, mass industrial production and energetic promotion and distribution, was assumed. The American ideal of generosity and equality, if not the American assumption of moral supe- A1063 East Pass Pass Dollars Not So Mighty But it is not the same in Western Europe now. The reliance on American nuclear power remains, but even this has been disounted by those here in Europe who no longer believe in an expansionist and aggressive Soviet Union. the dollar is not so Meanwhile, m!ghy. Even the Americans who work in Europe find, when they get up in the morning, that it buys less in Germany, Britain and France as the months go by. Also, the Western Europeans, rot forgetting the Japanese, no longer accept the notion of Americas lead in scientific innovation, mass production, advertising, relations and distribution. More Generous to Nixon Announcinq a new condominium community The logical and asked-fo- r successor to Three Fountains and Three Fountains East. Little will be different but the address: 1525 East and 6100 South (Vine Street). the elegantly furnished models at Three Fountains East or telephone our Sales Office for further information and first choice of select locations. Visit Particularly the Japanese, and the Germans, feel that tneir science, industry, promotion, distribution, and servic can not only compete with the United States in the markets of the world, but thrt they can even compete with American products and service in th Amen-ra- n market. As for the American ideal of unity and equality at heme, and generosity and Jfe- V -- building on mir experience to create a better environment tor you Sales Office. Fiftieth South and Ninth East (One block South of Va i Winkle Expressway) Open Daiiy from 10 a m. until 7pm Telephone 262 4537 JV Si 4 i J. - , "VS ' n |