LETTERS
Letters Screwing of the Average Taxpayer Congratulations on your excellent article in the January, 1973, issue by James Fallows, “The Screwing of the Average Taxpayer.” America needs tax...
...It would be inefficient, illogical, and costly...
...WALTER W. HELLER Minneapolis, Minn...
...It was civilian spending, tax cuts, and monetary expansion that were moving the economy steadily towaid stable full employment, and Vietnam spending that overheated the economy and saddled us with inflation...
...The editor replies: SID TAYLOR While I believe that the First Amendment permits government aid to private schools, I think the Fourteenth Amendment would prohibit such help to any segregated school...
...In fact, if the guaranteed income concept does not replace these patchwork programs of the present welfare system, it will be like trying to put a new engine in an old car without taking out the old engine...
...Thus both the Moynihan and McGovern proposals had the Achilles heel of potentially astronomic cost...
...Therefore, when the concept of minimum income is reintroduced, it should be: accompanied with an extensive list of federal programs that can be reduced or eliminated as a result of the guaranteed income program, emphasizing the trade-offs between the present and future and most importantly reducing the total costs of the future programs...
...There was, Shapley says, great concern about this: “Could we afford the consequences of such ii decline in defense procurement...
...Branch’s analysis of Moynihan’s shell game reemphasizes the basic importance of the concept of a guaranteed income...
...David MacMichael is a senior social scientist at the Center for Study of Social Policy...
...America needs tax reform...
...These two programs alone will total $54.3 billion in 1974...
...It also urgently needs spending reform...
...LUCIE DUPIN Washington, D. C. Lucie Dupin is a pseudonym for an employee of the Executive Office of the President...
...He or she, black or white, has become the new “economic slave” on the Plantation of Federal Misspending...
...More radical proposals would even include the elimination of the unemployment insurance trust funds since people would be guaranteed a minimum income regardless of work status and the social security trust funds...
...Both of these benefit programs are financed by regressive payroll taxes so their elimination would have the additional benefit of making the total federal tax system more progressive...
...It means that there is plenty of time for a thorough exploration of the programs to be replaced without causing hysterical defensiveness on the part of the present beneficiaries of these programs...
...For example, if the guaranteed income provided an adequate living standard, all of the food programs, veterans non-service connected pensions, housing aids, and possibly medicaid would become extraneous and should be reduced or eliminated...
...McGovern, probably for similar reasons, didn’t face the question of what programs were to be replaced...
...As I was sailing along with you on your fascinating Moynihan article, I hit a reef in your astonishing parenthetical assertion that the Kennedy liberals had compromised their principles “when they decided the only way to reach full employment was through defense spending...
...The FAP and McGovern proposals differed in magnitude, but they agreed that a minimum income should be the right of every citizen in this country...
...Who will pay this bill...
...DAVID C . MACMICHAEL Menlo Park, Calif...
...He is one of the very few space policy-makers now willing to admit that th.e greatest scientific adventure in modern times was underpinned by some formidable realities closer to home...
...When President Kennedy ran into a brick wall in Congress in his civilian spending proposals (which were in good part motivated by a desire to get thle economy moving again), he turned to the big income tax cut, which his liberal economic advisers recommended as the fastest way to revive the economy and provide the will and wherewithal for his domestic initiatives...
...Here is what liugo Young, Bryan Silcock, and Peter Dunn wrote in “Why We Went to the Moon” (me Washington Monthly, April, 1970): Of all the people involved, none was better placed to witness ,the unfolding drama than the man in charge of both space and defense affairs at the Bureau of the Budget, Willis H. Shapley...
...Moynihan probably didn’t want to deal with it in 1970 since it could arouse the anxiety of the beneficiaries of the programs to be replaced...
...Given the stimulus of the tax cut, the economy was moving steadily toward full employment without inflation (unemployment went down to 4.4 per cent with inflation holding at two per cent) by mid-1965, when Vi1:tnam escalation knocked the whole program awry...
...Thus I see the Constitution permitting a program of aid to elementary and secondary schools generally, including private and parochial schools, but not including any segregated schools...
...The total cost of FAP in the original bill (HR 1631 1) was $13.7 billion...
...Shapley, a reflective intellectual who sits somewhat oddly beside the gung-ho pioneers of space, later became a senior official at NASA itself...
...The editor replies: Professor Heller is right...
...The editor replies: We agree...
...The White House and Congress should spend less time expounding our GNP and take a hard look at our TLI...
...It will be crucial to any future proposal of a minimum income guarantee that this criticism is more effectively countered than in the past...
...Washington, D. C. Sid Taylor is research director of the National Taxpayers Union...
...With Atlas, Minuteman, Polaris and Titan, the four main elements of American strategic power, all moving toward completion, industry, too, was anticipating harder times...
...Milton Friedman made this point in our May, 1972, issue (“The Case Against Social Security...
...One of the major successful arguments used against both FAP and McGovern’s proposal was the large costs of both programs...
...By 1980, the programs mentioned above will cost over $100 billion annually and therefore should be a major factor in considering the price and feasibility of future guaranteed income proposals...
...Walter Heller is Regents’ Professor of Economics at the University of Minnesota and former chairman of the Council of Economic A d visers...
...McGovern’s total cost would have been $210 billion gross with a net redistributive effect of about $22 billion after a proportional income tax...
...Both the FAP and McCovern proposals netted the present welfare program, but neither proposal considered the possibility of netting a number of other government programs which would tie redundant if the guaranteed income concept was adequately structured...
...You guessed it-the American taxpayer...
...This has one advantage...
...These programs, including maintenance assistance, would total over $20 billion in 1974 alone, and therefore would be a substantial help in defraying some of the costs of an adequate guaranteed income program in this country...
...So you have it just backwards...
...Public Help for Private Schools Re Charles Peters’ “Winning Back the Ethnics, Public Help for Private Schools” [January] , any legislation that indiscriminately subsidizes directly or indirectly private schools is undesirable, whatever the political use to which it might be put...
...It has largely been lost in campaign rhetoric that McGovern’s original proposal of a ~ minimum income grant, based on Professor Tobin’s 1966 proposal, also shared the basic concept of a guaranteed income with FAP...
...The most immediate earthly benefit of the moon program has #clearly been the one which Willis Shapley described when he disclosed the reasons underlying Kennedy’s decision: the pumping of jobs and money through the aerospace industry into the economy at large...
...A reading of history as perverted as that (even if fashionable in the Nixon White House) is hard to come by in light of the facts: During the Kennedy-Johnson Administration, unemployment was reduced from a peak of seven per cent in 1961 to 4% per cent in August of 1965 at the same time that defense expenditures dropped from over nine per cent to only seven per cent of GNP...
...Defense expenditures went down...
...Letters Screwing of the Average Taxpayer Congratulations on your excellent article in the January, 1973, issue by James Fallows, “The Screwing of the Average Taxpayer...
...Moynihan’s Ship of Fools Taylor Branch’s article on Moynihan’s “ship of fools” [“Pat Moynihan’s Ship of Fools,” January] is an important restatement of the original merits of Nixon’s Family Assistance Program...
...We estimate that the Taxpayer Liability Index (Federal debt plus contingent liabilities) is now approaching $2 m‘llion dollars...
...The McGovern experience will scare politicians away from the guaranteed annual income for at least the next few years...
...While you might help preserve socioeconomically balanced schools in the central city you would also help underwrite segregation academies elsewhere...
...But space expenditures went up...
Vol. 5 • March 1973 • No. 1
