University Daily Kansan
Wednesday, Nov. 18, 1964
Page 2
Congress Puts High Priority On Excise Taxes. Medicare
WASHINGTON —(UPI)— New ideas for remodeling the nation's tax structure again will be high on the priority list when the 89th Congress opens its doors in January.
The lawmakers are likely to cut excise taxes and raise social security taxes in the next session, but when and how much depends on still developing fiscal and political factors.
The new Congress also will be asked to clarify the taxing powers of the states and take another look at the special status given non-profit public foundations.
It's unlikely that the tax legislation enacted next session will be as historic as the last which involved the biggest cut ever.
NEW IDEAS SUCH as parceling out a portion of federal revenue to the states, and dropping most personal tax deductions in favor of lower tax rates also are on the agenda for study. Both are considered a bit too drastic for approval this year, however.
However, traditional legislative preoccupation with the pocketbook is bound to leave the tax system looking a little bit different when this Congress closes shop in 1966.
TWO UNKNOWN factors will determine the direction and emphasis of future tax changes.
Old perennials such as the business-backed national sales tax, special income tax deductions for education costs, and increasing the $600 exemption also will be heard from . . . and probably ignored.
One is President Johnson's budget; it serves as the master plan for government spending. The other is the state of the economy which will decide how much money is available to finance government programs.
Present signs point to early action on the President's bill to set up a health care plan for the aged financed by social security taxes. This proposal—a favorite of liberals for
15 years—nearly passed this year, and the apparent strategy is to strike while the momentum still exists. The administration estimated that social security taxes would have to be raised $1.2 billion a year to pay for such a "medicare" plan.
A PROBABLE INCREASE in cash benefits for social security recipients also is in the wind, which could push the tax rate even higher. At present, the payroll tax is 3-5/8 per cent of a worker's first $4,800. The employer matches the contribution.
The President also is committed to reducing or abandoning some of the $14.5 billion in excise taxes—a hodge podge of levies on 75 items enacted during World War II and the Korean conflict.
About $550 million in consumer excises on cosmetics, luggage, jewelry, furs and handbags will be the first to go. Taxes on alcohol, tobacco and gasoline—which account for about 70 per cent of the $14.5 billion in excise revenue—are considered untouchable.
The alcohol and tobacco levies are being defended for social reasons. The gasoline taxes are channelled into the highway trust fund to help finance new roads.
HOWEVER, THIS STILL leaves up to $4 billion which could be cut if the administration so desires.
Congress also is expected to devote its attention to long-standing problems of special classes of tax-payers.
A house Judiciary subcommittee will recommend legislation to clarify state taxation of businesses which operate in more than one state. This long has been an unchartered legal wilderness, complicated by conflicting concepts about state and federal jurisdiction. Business interests claim the situation is chaotic.
DON'T MISS
Chairman Wright Patman, (D-Tex.) of the House banking committee, has claimed many of these foundations were set up to escape taxation rather than for public service purposes.
TREASURY TECHNICIANS also are taking another look at the rules which give research and charitable foundations special tax privileges.
There also is administration interest in a proposal by Sen. Russell B. Long (D-La.) aimed at drastically revising the income tax to simplify returns.
THE TEE PEE VACATION PARTY Monday THE CRABS 12:00 Closing
The Classical Film Series presents
"FREAKS" (1932 U.S.A.)
The first so-called "Horror" Film - A masterpiece by Tod Browning
Wednesday — 7:00 p.m.
Admission 60c
Fraser Theater
- BOOKER TEE and THE M.G.'S (Green Onions & Many Others)
- SET-UPS WILL BE SERVED FREE TO SENIORS
- SPECIAL PERFORMANCE BY A GROUP OF YOUR FAVORITE SENIOR GIRLS
- FRIDAY, NOV.20 8-12 p.m.
- SENIORS WITH ID's FREE; SENIORS' GUESTS----$1.00
- DRESS: COAT AND TIE