TIDBITS AND OUTRAGES Speak Up, I've Got a Lobbyist In My Ear
Spear, Joseph
Tidbits and Outrages Speak Up, I’ve Got Lobbyist In My Ear We are devoting our entire Tidbits and Outrages section this month to the following play, as compiled by Joseph Spear, a journalist on...
...Brophy: There is increasing foreign competition in the sale of telephone equipment and our competitors the Japanese have been making a market in the sale of telephone equipment in the United States, and I think this is another reason why the American manufacturer in selling to the telephone company and to the telephone company’s competitors need the seven per cent credit to encourage the purchase of Americanmade equipment...
...Senator Bennett: I object...
...Secretary, I am in support of the program, the President’s program, so I have no questions to ask which might generate activity on the part of the television cameras on my left...
...I am here to speak in support of the repeal of the excise tax on automobiles and light trucks in the amount respectively of seven per cent and 10 per cent...
...Act 111 The People Thomas H. Stanton: Mr...
...I certainly agree with that, and I think that you are headed in the right direction...
...John P. Roche (President, American Iron and Steel Institute): . . . The steel industry strongly favors H. R. 10947, and we believe it is important that the nation’s current economic problems be dealt with decisively and promptly...
...It is a big industry...
...And in this regard I made reference to the statistics presented by Secretary Connally before this committee...
...Stanton: I was asked a detailed question about capital incentives in the country...
...The familiar business investment credit has been deceptively labeled a “job development tax credit,” with no supporting facts from the Treasury to justify the misnomer...
...Senator Russell B. Long 53, Democrat, Louisiana...
...The only conceivable beneficiaries of any corporation are individuals, if there are any benefits...
...I think that you have pointed out the way this would be done...
...Stanton: The question was basically how our tax system compares with the systems of other countries as an incentive for capital investment...
...I believe that is the point you are referring to...
...Senator Bennett: In how much depth...
...We have six more witnesses including that panel you talked about...
...Roche makes the flat statement that the steel industry caught up with the technology of the world, he should come out to the Geneva plant and realize that it is fighting for its life with technology that hasn’t changed much since it was built in 1945...
...How do you think that our tax rates, tariffs, and incentives compare with other industrial countries of the world, our competitors...
...Kreml: We will be glad to do that...
...Senator Bennett: Well, this is a pretty good argument...
...We do not make these charges lightly...
...Mr...
...Senator Bennett: That is right...
...He gets about six per cent if he is lucky...
...Chairman, members of the committee, I would be the first to rejoice at the failure of my prediction...
...Senator Bennett: I have just one question, while we are waiting for the Chairman...
...These are proposals essentially to cut corporate taxes by 20 per cent permanently-by an annual average of about $7.3 billion-and without adequate economic justification by the Administration...
...Stanton: Well, sir, this is an important point because the Treasury has talked about something called the capital cost index, which deals with important questions of the effects of our tax structure on capital investment...
...Discussion off the record...
...board chairman, Bennett’s Paint and Glass Company...
...I speak particularly of the light trucks since 70 per cent of these of the gross vehicle weight of 10,000 pounds or less are used for personal transportation, for recreation, and for agriculture...
...Chairman and distinguished members of the committee, I am very grateful for the opportunity to appear here this morning...
...I can say without reservation, Mr...
...Secretary...
...Stanton: I would like to present some discussion of those figures...
...Senator Nelson: What is the tax part of the question...
...Franklin M. Kreml (President, Automobile Manufacturers Association, Inc...
...Senator Nelson: Yes...
...I am talking about the steel industry in general in the United States...
...The focus of the dialogue is the Senate Finance Committee’s consideration of President Nixon’s economic recovery pro am The major players, in approximate order of appearance, are as follows: Senator &lace F. Bennett, 73, Republican, Utah...
...Chairman, I think we should have those letters in our file to which the witness referred, those letters indicating the passing on...
...It is 10 minutes to 12...
...A corporation is a legal entity on paper...
...Senator Bennett: May I make the point he misstated the question deceptively...
...If you wish to submit something in addition for the record on the points raised here I am sureSenator Bennett: I will be glad to read it...
...How long are we going to have to sit here and listen to you...
...Senator Bennett: That satisfies my curiosity...
...H. R. 10947, as passed by the House, limits telephone companies to a four-per cent investment tax credit as against the seven per cent given to their competitors...
...It was the first time I have ever seen them...
...If there are detriments only, those who are done damage are individuals...
...The workers ought to be concerned, and I just would point out again that 68 cents of every dollar goes to wages and salaries...
...Senator Fannin: How are you to considerMr...
...that we filed with the House Ways and Means Committee, and are prepared to file with this committee if you wish, letters from each of the principals of the industry indicating clearly and unequivocally that the repeal, if granted, will result in the passing on by the manufacturer of the full amount of the tax reduction...
...Senator Bennett: Thank you, very much...
...Senator Bennett: That is all I want to say...
...Stanton: You criticized my bias first...
...First of all, if we take a look at the chart presented by Secretary Connally we find that there is surprisingly little correlation between tax incentives and the rate of economic growth...
...Senator Fannin: Absolutely...
...Senator Bennett: On what...
...former partner in Fannin Brothers, “an industrial concern marketing petroleum products and agricultural chemicals...
...Senator Fannin: I withdraw the question...
...Senator Bennett: Mr...
...Japanese switchboards are now being offered and sold to hotels and motels and even being used by some operating telephone companies because they have an obligation to the public to provide equipment at the lowest possible cost...
...I agree with you, Mr...
...Roche: Senator, I am not going to differ with that statement...
...The Chairman: Thank you very much...
...Stanton: On the tax part of his question, sir...
...The Chairman: Why don’t you pass them them up here and we will take a look at them...
...Senator Fannin: We only have a certain length of time for these hearings and receiving the testimony of our witnesses that are qualified to speak on the subject...
...Nader had hoped to be here today as well, to discuss the Nixon Administration tax proposals...
...Senator Fannin: Deceptive and misleading...
...Senator Gaylord Nelson, 55, Democrat, Wisconsin...
...but when Mr...
...I appear before you today to urge the earliest possible enactment of H. R. 10947 (the Revenue Act of 1971...
...Senator Bennett: Thank you, Mr...
...Mr...
...Act I1 The Lobbyists Theodore F. Brophy (Counsel, U. S. Independent Telephone Association): . . . We are seeking no special privileges for the telephone industry, but we are seeking to avoid discrimination against the telephone industry...
...Chairman...
...Senator Paul J. Fannin, 65, Republican, Arizona...
...I commend you for what you are doing to try to change the picture, because it must be, if we are going to be able to maintain the jobs we are all talking about and to pass that money back down through to the people that are so much in need in this country...
...There are many companies in i t . . . . I t seems to me that we are well on the road to having gotten over the hump that we have been sitting on our hands and not doing anything about modernizing plants...
...I agree with you...
...I assume, from what you have said today, that the goal you have is to increase employment in this country, and to make our Nation, to the greatest extent possible, competitive with the other countries of the world...
...Stanton: . . .After watching the Ways and Means Committee draw up this bill in only three days of secret session, and after watching the House pass the bill under a closed rule after only one hour of debate, and with only about 30 Members of the House present for the non-rollcall vote-after watching that unfortunate democratic spectacleI would have to forecast that this committee also will not heed the recommendations of...
...Prior to 1968, such foreign switchboards could be used only for internal communications.] I am sure they didn’t...
...now I would like to present the facts...
...Stanton: Thank you, sir...
...economists, and that the Nixon Administration juggernaut will roll over the Senate Finance Committee as it rolled through the House...
...10947 has been criticized as favoring business over individuals...
...Was your question on tax incentives...
...The Chairman: All right...
...The Chairman: Senator Bennett...
...but it appears that Treasury deception and misstatement have led to an atmosphere in which knowledge and economic fact will not play a role in the passage of the corporate tax relief bill of 1971...
...author, Faith and Freedom, 1950, and Why I am a Mormon, 1958...
...That is all...
...To speak descriptively of this vehicle, it is a four-wheel, single-tired vehicle...
...For example, Japan has had a phenomenally high rate of economic growth and yet the United Kingdom, which has a relatively lower rate of economic growth, has more tax incentives...
...Senator Bennett: I heard the rates and tariffs...
...Tidbits and Outrages Speak Up, I’ve Got Lobbyist In My Ear We are devoting our entire Tidbits and Outrages section this month to the following play, as compiled by Joseph Spear, a journalist on the staff of Jack Anderson...
...Stanton: I am sorry you don’t wish to listen to my presentation in detail and I will submit something for the record...
...Mr...
...I am not discounting at all the importance of the importance of the investment tax credit, but I do want to point out that this matter of obsolescence in the steel industry has been overworked, not by the firms of the industry, but unhappily by many of those who are not too much interested in the steel industry prospering in the United States...
...We hope that there will be favorable action on this matter by this committee and that the overall program will be adopted by the Senate...
...Senator Bennett: I see...
...Senator Bennett: Is this going to be a lecture that will take us into this afternoon...
...Secretary Connally: To the investor...
...Chairman, H.R...
...Chairman, an objective analysis of the comments made in the House Ways and Means public hearings and the discussions in the executive sessions must conclude that this Nation needs a job development credit at a permanent rate of at least seven per cent in the years ahead...
...member, National Council of Boy Scouts of America, Elks, Moose, Rotary...
...He is ignoring those...
...Stanton: Well, sir, relatively little...
...The entity itself could not care less whether it makes a profit or loss...
...We have been spending billions of dollars every year for the past 10 years and we have brought our plant up to date...
...If United States Steel would like to tell us it is going to come out there and bring that up to the very latest modern technology, I would be happy, and until it does, I will go on saying that one of the benefits of the tax credit seven per cent investment credit, is the hope that plants like this can be brought up in line with modern technology...
...Senator Bennett: I am not going to pursue questioning...
...Chairman, I have no further questions...
...These tax proposals are an integral part of the comprehensive economic program announced by President Nixon on August 15...
...There are several reasons why the capital cost index mentioned by Secretary Connally is a deceptive and misleading figure...
...Kreml: . . . I would like to say...
...Our] figures indicate that rather than providing a “bonanza for business,” we have, if anything, gone too far in cutting individual income taxes at the cost of productivity, growth, and international competitiveness...
...Senator Bennett: Off the record...
...Secretary Connally: . . . The corporation is nothing except an entity through which individuals transact commerce and business...
...Assorted Lobbyists Act I The Administration Secretary Connally: Mr...
...former board chairman, Bennett Motor Company (an automobile distributorship) ; former president, National Association of Manufacturers...
...Stanton: Let me explain in detail...
...Mr...
...Chairman, that the technology of the domestic steel industry in the United States matches any in the world, including the Japanese...
...You mean to say when they purchased instruments of that kind they shut themselves off from outside connection...
...Senator Bennett: Which is 10 times as much as goes to dividends...
...three-term governor of Arizona...
...The Chairman: Senator Fannin...
...Senator Nelson: The chairman is back...
...some pictures of this vehicle...
...Chairman, and as you know, Mr...
...The Treasury Department, upon whom this committee and the American people must be able to rely for professional analysis and carefully considered proposals, has failed in its task...
...It is not, generally speaking...
...Senator Bennett: You are right in assuming that there are many families that are developing these as a second family vehicle...
...Thomas H. Stanton, a young tax lawyer and member of Ralph Nader’s Public Interest Research Group...
...Senator Nelson: I think he ought to be able to answer the question...
...I think this witness has had his time and he has indicated his bias, and I think we should go on to the next witness...
...Kreml: Sir, I was myself surprised when I looked at the one-ton truck of today as compared to previous years’ models...
...It seems to me about 10 years ago I spent a night in a Las Vegas hotel, and that hotel had these foreign telephones which are activated when you lift them up...
...Honorable John B. Connally, Secretary of the Treasury...
...Roche: No...
...don’t throw it away...
...Stanton: We are discussing a tax package and I thought I would concentrate on that...
...Rather, it offers misleading rhetoric and deceptive statistics in support of this exorbitant tax package...
...Secretary Connally: So I think the worst thing that can happen to the country is for us to be divisive in the type of comments that we make with respect to the entities through which we do business...
...Increasingly, these light-duty trucks are becoming a second car for an ever-growing segment of the American population and compete directly with the passenger car, particularly, of course, with the station wagon, ranch wagon, and such vehicles...
...Stanton: My point would simply be, if my words were too harsh, that the figures were not presented in proper context...
...Senator Fannin: I think we have had enough...
...What is your background and experience in business and government...
...My question was how do you think our tax rates, tariffs, and incentives compare with other industrial countries of the world...
...Senator Fannin: Thank you, Mr...
...Senator Nelson (presiding): What was it you wanted to say...
...I have...
...I would like to introduce supporting materials into the record for the benefit of those who wish to pursue these matters in greater detail...
...The drama, in three acts, actually took place last October in the New Senate Office Building...
...I have simply studiedSenator Fannin: Still, you are criticizing people with long experience in government affairs, and I accept your testimony on that basis...
...Senator Fannin: I think it is worthless to ask some questions on such biased testimony...
...Senator Fannin: Let me ask you this...
...Sir, we are prepared for questions in detail on any of these points...
...Brophy: Thank you...
...Brophy: I believe those were foreign instruments that were purchased by an independent telephone company serving in that area, Senator, and were not owned by the hotel at that time...
...Senator Bennett: I think every member of the committee has seen a one-ton truck...
...Chairman, members of the Senate Finance Committee, I am Thomas H. Stanton, an attorney and member of Ralph Nader’s Public Interest Research Group...
...Chairman, Senate Finance Committee...
...Senator Nelson: He sounds as qualified to me as most of the rest I heard here...
...Secretary, I commend you for an excellent statement and one that I think means a great deal to this Nation...
Vol. 4 • April 1972 • No. 2
