European Stars And Stripes (Newspaper) - September 14, 1978, Darmstadt, Hesse                                Page 12 the stars and stripes thursday september 14, 1978 Tom Wicker tax Cut plans must consider the unemployed what is the purpose of general tax reduction when inflation is running at an an Nual rate of 8 percent and unemployment remains near 6 percent inflation and the Dollar suggest conservative fiscal and monetary policies unemployment and declining growth seem to Call for expansion. To meet this dilemma neither Congress nor the Carter administration seems to have a Clear idea of what to do except that both want to Cut taxes and reap the political Reward. But when chairman g. William Miller of the Federal Reserve Board offered his advice last week to the Senate finance committee which now is writing its ver Sion of a tax reduction Bill already passed in the House he seemed to put Clear and Welcome emphasis on holding Down inflation. For one thing Miller suggested that the Overall amount of a tax Cut be held to $15 billion the House Bill totals $16.3 billion and sen. Russell Long the finance com Mittee s chairman and the Senate s tax guru is talking of increasing that to about $20 billion. Perhaps More importantly. Miller urged the committee to eliminate about $4 billion in scheduled tax cuts for individuals while suspending the scheduled january 1979 in creases in social Security payroll taxes. Miller May have been speaking Only for himself but president Carter in private also has expressed interest in this idea the Federal Reserve chairman coupled his payroll tax suggestion with a proposal that Congress conduct a comprehensive study of the social Security system in 1979, with a View to finding better ways of financing it than the enormous tax increases now scheduled annually Over the next dec Ade. That Only reflects what everyone who has studied the matter knows that last year s Bill to Rescue social Security was not Only one of the most onerous tax in creases in american history but still left the system basically under financed for the Long pull. More immediately however the payroll tax boost now scheduled for 1979 $260.32, to a total of $1,404.77 for persons paying the maximum rate of 6.13 percent on $22,900 of income would not Only effectively cancel for millions of americans the income tax cuts Congress apparently will provide these stiff payroll tax increases also Are highly inflationary and would add chair Man Miller estimated a half of 1 percent to the Price Index in 1979. That is because employers universally regard their Matching share of payroll taxes As an added Cost of employment hence they pass it along to Consumers in higher prices. This effect would be in addition to whatever inflationary Impact a general in come tax Cut would have. It does not make much sense in any Case to put Money in a taxpayer s pocket through general tax reduction then to take it out though payroll tax increases. And there is another blatant contradiction be tween income tax reduction and payroll tax increases a contradiction that is particularly senseless in a time of continuing hard Core unemployment. In the House passed tax Bill there is a provision to increase the present tax Bene fits for businesses that hire hard to employ Young people chairman Long has endorsed that idea for the Senate Bill too. What is the Point therefore of raising pay Roll taxes an action that increases the Cost of employment and makes it More difficult for employers to take on unskilled youths surely these two measures the social Security tax Bill passed last year and the tax reduction now pending ought to be considered As a whole rather than As Sepa rate and unrelated actions. Chairman Miller also weighed in against the currently fashionable notion that a reduction in capital gains taxes would be the proper Way to stimulate investment production and the Economy. While accepting the principle involved he suggested that the result would be too slow in coming to offer the immediate help needed by the Economy. His alternative was to scrap both corporate and capital gains tax reduction in favor of faster depreciation Fri toffs for businesses investing in new Plant and equipment. But the problem with both approaches is that while either might stimulate invest ment and production at whatever Pace neither would do much about the hard Core unemployed. Conventional business expand a first the Good news we re finally holding Sion instead would create greater de Mand for technological and administrative skills thus for trained educated work ers. That if the rate of expansion were too fast would generate wage inflation among such workers. But at any rate of expansion no demand would be created for unskilled and uneducated persons the hard Core unemployed most of whom Are Black hispanic and Young including a High percentage of females. Thus Miller s valuable suggestion that i1payroll-tax Relief be substituted for in come tax reduction is not enough. A sub Stantial share of tax Relief for business i ought to be conditioned on willingness to expand demand for those hardest to employ. C new York times prices Down. Then there s the choke other news it s open season again on busing for school desegregation. Just before a recent recess the Senate narrowly tabled an anti busing measure. The legislation had been co sponsored by the two senators from Delaware where in Ter District busing has been ordered for Wil Mington schools. The Bill would have required that a discriminatory purpose or intentional discrimination in education be a principal motivating Factor before a court could or Der busing As a remedy. It also proposed to stay All pending busing orders including the plan for the Wilmington schools. For Congress to impose guidelines on Federal courts in their application of the Constitution is an absurd and patently Ille Gal proposition. Indeed several of the Bill s sponsors admitted their doubts As to its constitutionality. Still the Bill was Defeated by a narrow vote of 49 to 47. Clearly something More was at work in the Senate than a regard for constitutional decision making. It appears that because busing is perceived As an unpopular course in the nation and because so Many senators constituencies seem opposed to court ordered busing As a remedy to deliberate segregation some politicians feel compelled to play to the galleries. Interestingly the deciding vote was cast by majority Leader Robert c. Byrd. Byrd has no reputation for liberalism and he did not vote again the Bill because he Felt it unconstitutional or unwise. Rather Byrd urged his colleagues to table the Bill be cause of the pending labor Day Holiday. The protracted debate and Parl Mamen tary mane vering would he advised tie up the Senate s fleeting time. Indeed the Lone Black in the Senate de Brooke said he would introduce scores of amendments designed to stall the education Bill if the anti busing measure passed. The few genuine liberals in the Senate saw the disruptive effect such legislation would have on adjudicated busing orders around the nation and the breach to the separation of Powers Between the con Gress and the judiciary. But 47 senator disagreed. The situation that occurred in the Senate comes on the heels of opinion polls and new social science surveys that spell trouble for court ordered busing. Social scientist David Armor did a study for the Rand corp. In California that linked court or dered busing to White flight from the Urban schools. At a time Black and White birth rates Are declining Armor compared actual changes in ethnic enrolment after desegregation with the projected ethnic enrol ments based on birth rates in 54 school districts wih some 20,000 students. Previous studies dispute Armor s conclusions about White flight. One such study done by professor Christine Rossell showed that while some White flight occurs in the initial year of court ordered desegregation the decline of White students Levels off or reverses itself in later years. There fore the Long term effect of White flight is negative and desegregation proceeds. Armor admits finding a decline in Blach student enrolment in the Boston schools after desegregation which he terms  obviously Armor is under estimating the influence of other factors that contribute to population decline Anc shifts in ethnic school enrolments. Rossell Points out that school hoards have not fared Well in planning their future enrolment on projections based on birth rates and that the movement of people to new areas or jobs is More significant than any predilection to run because a court has ordered busing. Which social scientist is Correct or which Side of the Senate will prevail will have some bearing on future litigation and Public attitudes about busing. They will in fluence the shaping of remedies to unlawful segregation and discrimination if Feder Al judges shrink from their sworn oath to make the Constitution the supreme Law of the land. The separate but equal theory has been proved through the years to have been merely separate. Those who seek to perpetuate it at All costs Are not Only Tram pling upon decency and fairness and the mandates of the Constitution they Are Tri fling with the Security and character of our country