Senate Tax Revision Bill

Your editorial (May 25) said, “Don’t Rock the Boat.” It is discouraging to have The Times take such a strong position in favor of the Senate Finance Committee’s income tax bill. The 31-page summary of the bill has 183 sections but no detail nor explanations of the changes so we still do not know much about the bill.

The House bill, passed last December, has 2,243 pages, including the comments of the Committee on Ways and Means. It has been estimated that the Senate bill may be even longer. Just imagine the work yet to be done by the Joint Committee on Taxation to reconcile the two bills and all the oddities that slip in as the process moves along.

With all the confusion there have been many articles about the possible loss of particular deductions, the changes in rates and the tremendous shift of tax revenue from individuals to businesses but several basics have been overlooked.

Three of these are the misunderstanding about the shifting of the burden of an increase in the corporate taxes (estimated, by the committee to be $100 billion over the next five years), the loss of really progressive tax system, with the suggestion of imposing more sales taxes that are regressive , and thirdly the peculiar situation where tax increases are being discussed in the budget committees.

It seems specious to argue that social gain can be achieved by reducing individual taxes and increasing corporate taxes. This comes about because the burden of corporate taxes falls on individuals whether they are consumers, stockholders or employees. If the corporation has a monopoly it can pass the tax to the consumer in total. If it has a lesser degree of control over its market it can still pass on part of the new tax.

Perhaps it is time for our leaders to consider the burden of all taxes not just the income tax. Even after some people are relieved of federal income taxes they will still be subject to state income taxes, various kinds of sales taxes (some well hidden), Social Security taxes of 15% total on employer and employee, licenses and fees, property taxes, custom duties and many other taxes.

If the interrelationships of these taxes were taken into account we would have a better system to raise money for essential government activities.

GEORGE GIBBS

Emeritus Professor of

Accountancy and Economics

Claremont McKenna College