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UNIVERSITY DAILY KANSAN editorials
Unsigned editors represent the opinion of the Kansan editorial staff. Signed columns represent the views of the editor.
August 29.1979
China junket pays off
The returns on Gov. John Carlin's investment of $20,000 for a 14-day trade trip to China are still undetermined, but that investment was a sound and particularly insightful one for the people of Kansas.
For $20,000 of the taxpayers' money, Carlin not only was able to get himself and five members of his staff to China for 17 days, but he was able to lay the work for potential trade relations that could be very beneficial to the state.
More than a dozen businessmen joined Carlin and his staff at their own expense and they were able to establish important contacts with Chinese officials. Those contacts may lead to deals between China and U.S. grain companies for the sale of surplus Kansas wheat. And they could possibly facilitate cooperation in oil and natural gas ventures.
The sale of Kansas grain to China to reduce surplus stocks and increase the market price for farmers is just one of many trade possibilities discussed—and viewed by Carlin as good prospects—during the trip.
But the tangible economic gains are
dwarfed by the cultural and economic gains that could be reaped from increased contact and improved relations with China. For far too many years, the United States has been deprived of any meaningful cultural or educational relations with a nation of more than 800 million people.
China's vast resources—economic and cultural—have long been unaccessible to our nation. Even worse, we have long been ignored or unappreciated.
The richness of that culture and the human resources of a nation four times our size should not be ignored any longer, especially at a time when so many opportunities to learn about the Chinese are opening up.
Nor should the task of establishing contacts and improving relationships be left solely to State Department officials. Educators, businessmen and such have special ideas to offer the Chinese and the Chinese have plenty to offer them.
Gov. Carlin saw the opportunity to make a good investment with hopes of profitable future returns on Chinese resources and he wisely took it.
SALT pact approval is vital in arms race
The idea of strategic arms limitations for the Soviet Union and the United States has been a topic of great concern for our country since 1989 when SALT negotiations began.
In 1972, both countries agreed in a treaty not to pursue anti-ballistic missile systems. In 1980, the two countries agreed another treaty that would limit the number of warheads on nuclear bombs and restrict the use of unarmed weapons.
This treaty is a major breakthrough because it means that the Soviet Union as well as the United States is seriously in terested in controlling the arms race.
But before the treaty becomes official, it must be ratified by the Senate. The Senate has to approve the treaty will be heated and lengthy, but their decision should be easy—the treaty must be
If it is not ratified, it could damage Soviet-era nuclear weapons. Another Cold War. And you could put an end to future arms reduction efforts, which would only enhance the chances of a nuclear war.
It has taken more than 30 years to prove that the case is more important than fraud between the two countries. To see this wiped out is a very serious consideration because we may not be able to prove it.
The threat of another Cold War is frightening, especially in these times. During the Cold War after the World War II, there was a great deal of tension between the United States and the Soviet Union that caused war. The Soviet Union, such as the Cuban missile crisis in 1962.
The thought of a Cold War clash in the Middle East or Africa between the two countries is direful. In not being able to prevent a possible war, the would mount, leading to further distrust. Another Cuban missile crisis could result-but it would have happened in 1962 actually could happen.
The SALT II treaty also provides for some new agricultural technologies important because the two countries already are spending billions of dollars a year for the production and development of these crops.
These mass expenditures will increase as the two countries continue to compete to be the superior nuclear superpower, unless something is done now to control the arms race. Already, the United States alone has lost its weaponry to destroy the world six times.
There are many arguments for and against the treaty, but many of the opposition's arguments are weak or erroneous. One weak criticism of the treaty
john
fischer
COLUMNIST
it that it enables the Soviet Union to keep a larger mass force than the United States. The Russian military force than the United States. What the treaty will do, in effect, is to limit on their ability to inflict a blow on them.
Without the treaty, the Soviets could further expand their missile and destructive forces because there would be no limitations on their ability to strike. There is a limit on the production of some Soviet missiles, such as the Backfire backbomber, and a decrease in the number of warbands both countries can use per missile from 10 to 30. This is a main point of the treaty.
Another feeble argument is that the United States will not be able to verify Society compliance of the treaty. However, under the treaty, the Soviets would have to assist the United States in its monitoring of missile and weapon production and experimentation. Without the treaty, it would be difficult for the Soviets' new developments, tests or force.
There also is the argument that the Minuteen missiles will be weakly susceptible to a Soviet nuclear attack by the early 1980s. This, however, is not due to the terms of the treaty, but is merely a fact as long as they continue to improve upon their weaponry.
The treaty does not provide any restrictions on the United States' improving MX missiles, Trident II and cruise ships. The force can be used to strengthen our defense.
So while some senators call this treaty merely a piece of paper and say it holds no true importance, it should be considered a key tool for defining the predictability in future planning for our defense and for the continuation of arms limitations negotiations between the United States and Iran.
The Soviets already have threatened that if the treaty is not ratified, further arms reductions negotiations and foreign relations would be seriously affected.
So not only would failure to pass the treaty further escalate the arms race as the two countries blindly compete to be the nuclear warrior, it also could lead to another Cold War.
The SALT II treaty is important and is a step in the right direction in the prevention of a world nuclear disaster. We should hope our senators will understand that.
Profits tax unfair to oil companies
As Americans spent more and more gasoline, they bought gasoline and then spent more money for a gallon of gas each week, they began to look for someone to blame, someone toward the government.
Too often unfortunately, Americans have chosen to make the big oil companies and their officials the evil characters in this energy drama.
The fact is that these oil giants are unwielding of such criticism and they are about to be dealt a serious blow by Congress. Congress is struggling with the oil profit bills tax that would, in effect, penalize oil companies for earnable large profits.
david COLUMNIST preston
Many say the companies are accumulating large amounts of the taxpayers' money by constantly raising prices and yet earning record profits
The oil companies are not at fault for our nation's energy shortage. The public listens to the media declare that Exxon and Texaco's profits are up some several million dollars over last year and without analyzing the situation, much less the油 company's earnings, the subject, it jumps on the group that appears to be making money at its expense.
Publicity surrounding the windfall profits tax also has added to a distrust of oil companies. Naturally, the reaction to business operations is negative. It needn't be.
The oil companies have had to contend with various outside influences in their efforts to keep oil in the oil to meet consumer demands. They have upon foreign sources of oil and have fallen victim to several price increases on the market. For instance, the whims of the Organization of Petroleum Exporting Countries OPEC price increases from $35 a barrel of oil from Iran have put a strain on the availability of oil in this country. It is this availability that drives the price increases at the gas pumps.
Dependence on foreign oil has been necessary for the big companies because of the ceiling on crude oil prices that
Congress has placed on the industry. While drilling and refining costs have skyrocketed, the prices of an oil company for its crude oil have remained consant.
Companies such as Exxon are responsible to their shareholders and must be assured a good return on their investment. Under price control guidelines, the prospect of gaining a good return on investment not worth the risk of producing a potential oil field. As a result, the incentive to search for a new oil has sided.
Nonetheless, oil companies have spent millions of dollars annually on research sources rather than on alternative energy sources rather than on alternative energy sources new petroleum-rich land. It is also important to note that the profits of a corporation are usually paid to its company's officials, who are on fixed salaries. Shareholders are the ones who buy into the stock market and anyone may buy into the stock market.
But the amount of money an oil company makes is imminent in the face of such a gross intrusion by the federal government into business. The idea of further taxing the business, the idea of because it appears that business is making an inordinate amount of money is
ludicrous. It smacks of the worst kind of socialism.
A tax on the additional profits of a tax company runs contrary to the entire idea of enterprise. For years, making a larger tax on business remains, a prime motive in American business. The government, through many of its present tax laws, already has taken away some of the benefits of the business world. Further taxes would signal further government control in business, a precedent for government actions in areas of society, it would be a sad step.
If consumers are so concerned with the price of oil, then perhaps a bit of conservation would be in order. But no more than a quarter of all oil practiced in the United States. If citizens would begin to conserve, then oil companies, free from the ceiling on oil prices, would have less incentive to domestically and become less dependent on imports. Then we could begin to analyze our possible alternative forms of energy for solutions to our petroleum woes.
To blame the oil companies is wrong. To try to gain revenge by implementing a windfall profits tax on the companies' additional profits is deadly.
Tax credit making foreign oil flow
N. Y. Times Special Features
By JAMES C. ROSAPEPE
N.Y. Times Special Features
WASHINGTON—Since the Nixon administration, energy independence has been the rallying point of government officials. With that being decontrol of oil prices, an action that, at a cost to consumers of $1.2 billion, domestic production and reduce oil imports.
Later, the House overwhelmingly implem-
mented a bill that would allow synth-
ical fashions at a likely cost of at least
several billion dollars. Again, the
explanation was the need to reduce our
costs and cut taxes.
Yet, while American companies are asked to pay higher prices and higher taxes in the fight for energy independence, the government is paying the major oil companies $1.2 billion a year to ensure overseas oil production. The vehicle for this substantial subsidy is the foreign tax credit.
"The USE OF the foreign tax croup provides an incentive for oil and gas companies to import oil rather than to develop the domestic production of this gas," said Peter Harris, a partner in Herbert Harris, D-Va., recently to the House Ways and Means Committee.
WHILE BIG foreign oil-producing countries expect to be paid for their oil, they traditionally have not imposed corporate tax. As a result, examples, imposed an income tax in 1860 at the request of the oil companies. The companies thus were able to use the foreign tax credit to reduce their U.S. exports of oil and increase payment increases to Saudi Arabia.
Now, with the prospect of exploration by
the companies, China is considering creating a corporate income tax instead of a royalty system. Oil industry and Treasury Department lawyers have suggested how to design the tax so the companies can credit it against their American taxes.
Like any owners of natural resources, oil-producing countries want to be paid for pumping within their borders. General Electric has decided the oil are called royalties—that's the name for payments made to American companies in the government for oil drilled on public land.
Under current law, if the oil company payments to oil-producing countries are less than $25 billion, use the foreign tax credit to reduce their American tax bill, dollar for dollar, by the amount of the payment. If on the other hand, the payment is called royalties, they are only deductible like any other business expense—and not half as much as to the oil companies.
In June, the IRS proposed new regulations aimed at clarifying the difference between foreign royalties and domestic royalties. Thepanies were not pleased, neither were they traumatized. The proposal tightened the definition of a foreign tax credit. But notes from the Treasury's report on Oswald, "The rule-making process cannot preclude countries fromudjustizing their tax systems to conform to whatever comes the treasury and IRS decide upon."
THE PRODUCING countries cooperate in this craude because they don't care when the companies sell their goods or royalties. To them, the amount counts, not the name. But to the multinational oil companies, the distinction means billions of dollars. The difference is that countries can call royalties income taxes, and persuading the Internal Revenue Service to pay the companies sales bills in U.S. taxes.
GIVEN THE producing countries are well off in the need of the media, the needs of the oil companies, there is no reason to think the new regulations will be effective. To do so will require legislation.
A House bill is being sponsored that would deny the companies use of the foreign tax credit on oil-related income. The bill avoids the elusive distinction between income taxes and royalties. Under it, the companies would have to pay royalties instead of producing oil from producing countries without a hefty subsidy from the taxpayer.
In the coming weeks, Congress will vote on oil-price decontrol, synthetic fuel plans and other costly schemes to promote domestic energy resources. It would do so under the proposal to end the $1.2 billion bill subsidy for foreign oil development.
James C. Rosapelle, once a legislative aide to former Oklahoma Senate. Fred Harris, who was a Senate Finance Committee member, is a partner in a consulting firm and a member of the Energy's National Petroleum Council.
Music in area bars wrecks ears, conversation
Last night I overheard, or thought I overheard, the following conversation at the Brewery, although it could have taken place at any of the two 3.2 bars in Lawrence.
"How was your summer?"
"I said how was your summer?"
"Oh yes, it was a very hot summer"
"Yeah, I've had the same problem with my car before."
"I said how was your summer?"
"Oh yes, it was a very hot summer."
"What?"
"What?
"I said it was hot, the sunset that is."
"I said it was hot, the summer that is,"
"Yeah. You had the same problem."
This pathetic attempt to make conversation was stifled by a joke box pounding top 40 music at a noise level approach of a screening 74? If the art of sound is no longer the generation of video-heads, it is in these establishments that it will surely lapse into the last stages of cardiac arrest, only to be rescued by the rigors of rior mortis and inevitable decay.
"What did you say?"
Music is not supposed to be the main attraction at a bar as it is at a concert. People are. Music is for atmosphere. But these bars
tend to have all the atmosphere of a Pittsburgh steel mill. you know the person who controls the volume knob, give him what he knows, how know it turns out. I'd like to hear from you.
Jim Berg Northfield, Minn.. graduate student
U.S. should learn lessons of SALT I
Enclosed is an open letter to Sen. Nancy Kassebaum, R-Kan., concerning the SALT negotiations. It is intended for your input, please. Thank you.
Dear Sen. Kassebaum:
I urge you to oppose SALT II in any form. I would remind you that SALT I brought the Communist Soviets equal to us militarily.
and SALT II will put them ahead of us. We must have them and the murders with the numberers had a number of 92 treaties they have made with our country, and who have sworn and intend to "burse us" in these conflicts.
in the nuclear arms race is to stop all and trade with the Soviets, for without it, they (the Communist leaders), with a socialistic economy, could not survive.
appreciate a reply. Thank you.
Rob Murray
The solution to our questionable position
Mission Hills, graduate student
KANSAN
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