in 1970, and shipments during the first 6 months of 1971 have declined even further to 53,000 units as compared to 75,000 units in the first half of 1970. Asserts that the repeal of the tax on truck trailers would simplify tax administration by removing this complicated and disputed area from the Code. Also, suggests that the import duties on foreign autos be used to help finance urban mass transit rather than divert monies from the Highway Trust Fund.

Minnesota Automotive, Inc., El Heirigs, Secretary (written statement): Recommends also the elimination of the 8-percent excise tax on truck parts and accessories. Indicates that because of the ambiguity of the regulations and the difficulties of application to certain truck parts usable also on automobiles and on nonhighway vehicles, the tax is both an administrative and financial burden.

John Lindauer, Professor and Chairman, Department of Economics, Claremont Men's College (written statement): Also, favors repeal of other non-regulatory excises to give greater stimulus to consumption.

American Iron Ore Association, John R. Greenlee, Chairman, Tax Committee (written statement).

Koehring Company, Vincent R. Peterson, Vice President-Finance (written statement): Urges that the 10-percent excise tax on trucks, buses and trailers also be repealed to provide an economic stimulus to this industry.

American Farm Bureau Federation, William J. Kuhfuss, President (written statement): Urges that the excise tax on pickup trucks also be repealed.

National Grange, John W. Scott, Master (written statement).

(b) COMMENTS OF THOSE OPPOSING THE REPEAL OF THE AUTOMOBILE EXCISE

TAX

Honorable Henry S. Reuss, Member of Congress, Wisconsin (September 14): Favors this revenue being used in other areas.

Ralph Nader, Attorney, Washington, D.C. (September 14): Argues that the proposal to repeal the excise tax is not adequately supported by the administration as a means of creating new jobs. Additionally, contends that there is no assurance that automobile dealers will pass on to consumers the benefits of the repeal. Moreover, expresses doubts that, in view of the problems of air pollution and traffic congestion. the repeal of the excise tax is a desirable way of stimulating the

economy.

Honorable Bella S. Abzug, Member of Congress, New York (Sept. 16): Questions whether we need more cars to cause more pollution and congestion. Contends that the proposed tax rebate would benefit primarily the auto industry and those who can afford a new car.

Taxation With Representation, Arlington, Virginia (September 17): Indicates that statements filed on behalf of this organization take the position that, for environmental and other reasons, the auto excise tax should not be repealed.

The United States Conference of Mayors (written statement): Objects to the permanent loss of tax revenues.

2. Acceleration of Individual Income Tax Cuts

(a) COMMENTS OF THOSE FAVORING THE ACCELERATION OF THE SCHEDULED INCREASES IN THE PERSONAL EXEMPTION AND THE STANDARD DEDUCTION

Honorable John B. Connally, Secretary of the Treasury (Sept. 8): Indicates that the speed-up to 1972 of the scheduled 1973 increases in the personal exemption and the standard deduction will add $2.2 billion to consumer purchasing power in calendar 1972 in addition to the scheduled $2.7 billion individual tax cut. The personal exemption is presently at the level of $650 per dependent and is scheduled under the Tax Reform Act of 1969 to increase to $700 on January 1, 1972, and to $750 on January 1, 1973. Recommends that the $750 level be advanced to January 1, 1972. The standard deduction is presently at the level of 13 percent of adjusted gross income with a $1,500 maximum, and is scheduled to increase to 14 percent with a $2,000 maximum on January 1, 1972, and to 15 percent with a $2,000 maximum on January 1, 1973. Recommends that the 15-percent level be made effective January 1, 1972.

States that the scheduled and recommended income tax reductions will more than offset the scheduled 1972 increase of $2.8 billion in social security taxes on employees.

Honorable George P. Shultz, Director of the Office of Management and Budget (Sept. 9): Maintains that it is preferable to provide needed stimulus for consumer spending through the proposed tax cuts rather than through increased Government spending, since this leaves the basic decisions as to the type of stimulation to the private sector. Indicates that the Administration's new budget estimates place the "full-employment budget" into an $8 billion deficit and the unified budget in a deficit of $27-$28 billion. Warns against excessive tax reduction stimulus and the possible inflationary results of large full employment budget deficits.

George Meany. President, AFL-CIO (September 13): Supports the concept of tax reductions for individuals on an equitable basis, especially in the low- and medium-income groups. However, believes that these reductions should be accompanied by tax reforms that close existing loopholes and abuses and bring additional funds into the U.S. Treasury. Points out that the personal exemption increase is a small, one-shot tax relief proposal, moving up by one year that which has already been scheduled to become effective in 1973.

American Bankers Association, Allen P. Stults, Vice President (September 13).

Hon. Henry S. Reuss, Member of Congress, Wisconsin (September 14): States that the speed-up may not really be needed but has more merit than an investment tax credit. Favors raising the low-income allowance.

National Association of Manufacturers, Melvin C. Holm, Member of the Board of Directors (September 14): States that while concurring, they would favor rate reductions rather than personal exemption increases and increased minimum standard deduction rather than increases in the limit.

Machinery and Allied Product Institute, Charles W. Stewart, President (September 14).

Rinfret-Boston Associates, Inc., Pierre A. Rinfret, President (September 14): States that while favoring the concept, greater emphasis should be placed on lower incomes by increasing the minimum standard deduction rather than increasing the personal exemption and it should be retroactive to July 1, 1971.

American Iron and Steel Institute, John R. Roche, President (September 14): Expresses general support for the administration's proposal.

National Machine Tool Builders' Association and American Machine Tool Distributors, Joel Barlow, Counsel (September 14): Supports the Administration's proposal for individual income tax relief. Believes that it will minimize hardship on lower income groups and would result in greater consumer purchases and business activity.

Ralph Nader, Attorney, Washington, D.C. (September 14): Supports a speedup in the low-income allowance and the standard deduction. Suggests that the speedup should be made retroactive to 1971. As an alternative to accelerating the personal exemption, recommends a fixed consumer tax refund of $50 for 1972. Indicates that this refund, which would cost $4 billion, would be temporary and would put more money into the hands of the average taxpayer than the automobile excise tax repeal, at a lower cost.

Machinery Dealers National Association, Saul S. Pearl (September 14): Expresses general support for the administration's proposal.

Chamber of Commerce of the United States, Walker Winter, Chairman. Taxation Committee (September 15): Supports the speedup of individual income tax cuts provided that, as proposed, sufficient cuts are made in Federal expenditures to meet the anticipated revenue losses. States that the additional purchasing power produced by the speedup of the tax cuts should spur the economy.

Tax Council, John R. Greenlee, Chairman. Tax Policy Committee (September 15): Indicates that the speedup has the virtue of adding to the deficit for only one year. Suggests that if there are to be further individual tax reductions that the economy as a whole and the unemployed would be best served by an across-the-board tax cut.

National Federation of Independent Business, James A. Gavin, Legislative Director (September 15).

American Retail Federation, Philip Lifschultz, Chairman, Taxation and Fiscal Policy Committee (September 15): Believes that the acceleration to 1972 of the tax reductions previously scheduled for 1973 will provide the initial impetus to a new renewed demand stimulation producing increased consumer sales, additional new store construction starts, and a higher level of production of consumer goods and services.

Honorable Donald D. Clancy, Member of Congress, Ohio (Sept.16) : Believes that the advancement of the increase in the exemption would add strength to the economy.

National Association of Retired Federal Employees. Thomas G. Walters, President (Sept. 16): Feels that this tax reduction will help those low-income persons on fixed retirement pay.

67-183 0-71-1

Urges that Congress go beyond the President's proposal and grant a personal exemption of $1,000 and a 20-percent standard deduction with a $2,000 ceiling, effective July 1, 1971.

Honorable Bella S. Abzug, Member of Congress, New York (Sept. 16) Recommends, in place of the $9 billion "business boondoggle," that the low-income allowance be increased to $2,000, for an estimated revenue cost of $4.5 billion. Claims that this money would be used immediately by low- and middle-income people to increase consumption.

Taxation With Representation. Arlington, Virginia (September 17): Statements filed on behalf of this organization assert that the proposed individual income tax relief goes mainly to middle and upper income families. It is suggested that consideration should be given to tax cuts for low-income groups.

International Economic Policy Association, Dr. N. R. Danielian, President (September 17): Supports the proposed earlier application of the higher exemption allowance from personal income taxes as it would have the desirable effect in stimulating consumer purchasing power. Asks that the investment tax credit not be curtailed to achieve this result.

Honorable William J. Keating, Member of Congress, Ohio (written statement): Supports acceleration of personal exemption and standard deduction increases.

John Gardner, Chairman, Common Cause (written statement): Indicates that tax reduction is needed for individuals but that an increase in the minimum standard deduction is the preferable way in that this would concentrate the tax relief in the lower-income groups. American Iron Ore Association, John R. Greenlee, Chairman, Tar Committee (written statement).

National Grange, John W. Scott, Master (written statement).

John Lindauer, Professor and Chairman, Department of Economics. Claremont Men's College (written statement): Recommends greater tax relief to individuals, by providing an additional $1,000 deduction for each head of a household, and by financing part of social security from general revenues rather than by increasing social security taxes next year.

American Farm Bureau Federation, William J. Kuhfuss, President. (written statement).

(b) COMMENTS OF THOSE OPPOSING THE ACCELERATION OF THE SCHEDULED

INCREASES IN THE PERSONAL EXEMPTION AND THE STANDARD DEDUCTION

There were no witnesses or written statements that opposed the acceleration of the individual income tax cuts.

3. Job Development Credit

(a) COMMENTS OF THOSE WHO FAVOR THE JOB DEVELOPMENT CREDIT Honorable John B. Connally, Secretary of the Treasury (Sept. 8): Recommends enactment of a "job development tax credit," similar to the previous 7-percent investment tax credit, but with two major differences: (1) the credit should be at a permanent 5-percent rate except that it should be 10 percent for machinery and equipment

acquired in the one-year period beginning August 16, 1971, including property ordered before August 16, 1972, and delivered by February 15, 1973; and (2) no credit should be allowed for foreign-produced property as long as the temporary import surcharge is in effect-with "foreign-produced property" defined to also include property produced in the U.S. if more than 50 percent of the value is attributable to imported materials or components.

Contends that the 10-percent/5-percent credit will provide an effective incentive for investment in new productive facilities, which will provide additional jobs, help stabilize prices, and improve our international competitive position. Urges that this credit be in addition to, not in lieu of, the existing Asset Depreciation Range (ADR) promulgated by the Treasury earlier this year.

Honorable George P. Shultz, Director, Office of Management and Budget (Sept. 9): States that the two-tier tax credit rate is designed to provide an immediate stimulus to capital goods. Believes that both the credit and the Asset Depreciation Range (ADR) are needed.

American Railway Car Institute, Robert C. Ortner (September 13): States that the credit will go far in helping to make the railroad car fleet adequate and up-to-date. Recommends that the period for the 10-percent credit be extended to accommodate acquisitions of railroad equipment requiring a long lead time for manufacture

American Bankers Association, Allen P. Stults, Vice President (September 13): Favors credit as a means of arresting deterioration of business capital outlays and as a means of relieving pressure on credit markets because of reduced need for external assistance for financing capital acquisitions.

Norman B. Ture, Economic Consultant, Washington, D.C. (September 13): States that the credit would encourage a significant increase in capital goods, orders and production in the near term and will, in the longer term, increase productivity and real earnings. Estimates restoration of credit will increase capital outlays by $5 billion to $7 billion in the first year effective. Indicates that the expectations about the effectiveness of the proposed credit may not be fulfilled if ADR is withdrawn.

Council of State Chambers of Commerce, George S. Koch, Chairman, Federal Finance Committee (September 13): States that the investment credit should be made a permanent part of the tax structure so that taxpayers can rely on it in making plans. Indicates that the credit should be made effective April 1, 1971. Believes that credit should be at least 7 percent after end of 10-percent credit period. States that used property should be eligible as under prior law and certified pollution control facilities should be allowed the credit. Also, indicates that income tax liability should not be reduced by the amount. of the credit for purposes of determining the minimum tax for tax preferences.

Association of American Railroads, Frank E. Barnett (September 13): States that the credit will have an immediate and dramatic impact upon the railroad industry. Indicates that it will enable railroads to overcome freight car shortages and reduce cost of transportation. Since railroad equipment has a long lead time, recommends that termination date for the 10-percent credit be December 31, 1971, if a two-tier credit enacted. Prefers however, a 7-percent level credit.