PAGE TWO
—-SECTION OWE
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j The Objectives Os Tax
Reduction
The House of Representatives
has passed a tax reduction bill.
It now goes to the Senate where
it should be subject to a search
ing reexamination. Let us hope
that the reexamination will start
from a basic analysis of the ob
jectives which the tax cut is ex
pected to serve.
It might seem that the fact of
f tax cut is more important than
whatever aims may be in the
minds of the legislators who pass
it. But their conception of what
it is they are trying to accom
plish will certainly affect the
kind of tax cut we eventually
get. It can also influence the
subsequent climate for govern
ment spending.
One view is that the objective
of the tax cut should be to stim
ulate economic activity by rais
ing the level of total demand
If this is accepted, it seems tc
follow that the very purpose of
the tax cut would be defeated
if there Were corresponding
economy on the government
spending side. In a recent
speech, Dr. John P. Lewis, of
the President’s Council of Eco
nomic Advisers, said: the
needed demand-boosting job can
not be done by matching tax
cuts and expenditure cuts.”
Clearly, if the purpose of tax
reform is conceived in these
terms, a climate will have been
created which encourages, rather
than represses, increased spend
ing and bigger deficits.
The ‘‘demand-boosting’’ ap
proach, however, ignores the fact
that levels of economic activity
are determined not by demand
alone but by the interplay of
many complex forces in the
marketplace. A sounder con
ception of the aim of tax re
vision is that it should remove
the tax impediments to efficient
performance and long-term
growth of the private economy.
This would involye both miti
gating the incentive-depressing
rise in the graduated rates, and
freeing funds previously absorb
'd! by the government for in
vestment in private business.
When the objective of tax re
form is understood from this
■point of view there is nothing
inconsistent in advocating simul
taneous reduction of government
expenditures. On the contrary,
tax cuts and control of govern
thent spending serve the same:
purpose of releasing the growth
forces inherent in the private j
economy.
Most of our leading statesmen j
have declared themselves in fa-
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| vor of the strictest possible con
' trol of federal spending. Thus,
by implication at least, they
. have disassociated themselves
from the demand-boosting theory
in its pure form.
This is encouraging. How
ever, the House bill would have
been better if it had dealt more
. adequately with one of the chief,
’ obstacles to business growth—
the steep rise in rates through
. the middle brackets of income.
Also, the meagerness of the cut
in the corporate rate does not
do the job that is needed in re
leasing funds for business in
vestment.
Masonic Play Will Be
Presented October 17
The Arcacia Club of the Nor
view Lodge, A. F. & A. M., of
Norfolk will present its annual
play at the Edenton Masonic
Temple Thursday night, October
17. This year’s play is entitled
: ‘‘The Greatest of These.”
This group has presented Ma
sonic plays in Edenton for sev
eral years which has always been
well received, so that T. B. Wil
liford, master of the lodge, is
hopeful that a large crowd will
attend the play, which will be
gin at 8 o’clock.
Prior to the play a dutch sup
per will be served in the din
ing room beginning at 6:30
j o’clock.
| ■
That glory only is imperish
j able which is fixed in one’s own
j moral make-up.
Mary Baker Eddy.
THE CHOWAN HERALD. EDENTON, NORTH CAROLINA, THURSDAY, OCTOBER 10. 1083.
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