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Information Sheet: Sample--George McGovern's New Tax and Welfare Proposals at a Glance. 6 pgs. [Subject: Campaign] [Other Document], no date
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Information Sheet: Sample--George McGovern's New Tax and Welfare Proposals at a Glance. 6 pgs. [Subject: Campaign] [Other Document], no date
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Richard Nixon Presidential Library
Contested Materials Collection
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48
27
Campaign
Other Document
Information Sheet: Sample--George
McGovern's New Tax and Welfare Proposals
at a Glance. 6 pgs.
Wednesday, June 03, 2015
Page 1 of 1
INFORMATION SHEET:
10 ALL States with
SAMPLE
LtRs program
GEORGE MCGOVERN'S
NEW TAX AND WELFARE PROPOSALS
AT A GLANCE
On August 29, in a speech before security analysts in New York City,
McGovern outlined the following proposals:
New
New
Revenue
Spending
1. Cut in military spending by 1975
$30 bil.
2. Tax reform: closing loopholes
$22 bil.
3. Allocation to local school districts
to allow cuts in property taxes
$15 bil.
4. "National Income Insurance" to replace
present welfare system. Includes the
following items:
a. Public service jobs for 1 million
people and 2.5 million of their de-
pendents. Total of 3.5 million people
thus taken off welfare rolls.
$6 bil.
b. Expanded Social Security system
to take 3 million more off welfare
$3 bil.
C. Welfare for those who "can't work."
$5 bil.
TOTALS: $52 Billion
$29 Billion
MCGOVERN'S WELFARE - TAX - ECONOMIC PROGRAM
George McGovern in his "new plan" is proposing an assured
annual income -- $4,000 for a family of four. He is
"guaranteeing" jobs to everyone who wants them, via a
"public service" (make work) jobs program. Costs for the
McGovern welfare-income-jobs program is estimated at
$14 billion.
To finance this McGovern is proposing drastic revisions
in present tax laws; revisions that, if passed, would raise
$12.6 billion in new taxes from individuals and $9.4 billion
in new taxes from corporations, for a total new taxes of
$22 billion annually.
I. WELFARE SECTION
"National Income Insurance' ii
--assures $4,000 per year minimum level public assistance
(for family of four) -- at an added cost of $5 billion
(above current budget projections)
-estimates 12 million persons will be covered with this
program
proposes creation of one million "public service" (make-
work) jobs -- at cost of $6 billion
-expands Social Security payments to "over 3 million persons
who would otherwise be on welfare"
:
at cost of $3 bil-
lion (this expansion would take in the aged, the blind and
the disabled)
TOTAL program cost is
$14 billion in new funds
2
II.
TAX REFORM SECTION
Proposed Tax "Reforms"
Capital gains: eliminate capital gains tax break; tax cap-
ital gains as ordinary income, at full 100% of value
Capital gains at death: capital gains would be subject to
income tax at death of owner (this rule would also apply to
gifts involving capital gains -- would be subject to income
tax before being given)
--Tax-exempt bonds: while not forbidding these, McGovern
would encourage issuance of new taxable State-municipal
bonds by allowing 3 federal subsidy of 50% of the interest
costs of such bonds
Depletion allowance: phased out for oil, gas and all
natural resources
--Reduced depreciation allowances: recently enacted accel-
erated depreciation allowances for business investment and
equipment would be abolished and depreciation guideline rates
revised downward
-Investment tax-credit revision: to be substantially reduced
(details lacking in the McGovern proposal)
-Elimination of certain real estate tax shelters
Repeal of foreign tax breaks
-Tightening of death and gift taxes: much tighter, heavier
taxes on estates, levied on individual recipients (versus
estate itself before disbursal)
3
1. McGovern claims to have discarded his $1,000 per person
welfare grant idea; but, in fact, his new "national income
insurance" plan guarantees a family of four, $4,000 a year.
Which still comes out to $1,000 per person! McGovern has
the same program, but in new language.
2. McGovern has switched rhetorical emphasis from "guaran-
teed income" to a "guaranteed job" for "everyone willing to
work" -- but he doesn't comment on what he would do with
those unwilling to work -- There is no work requirement in
his "national income insurance" plan.
3. McGovern avoided hard questions of supplements for the
working poor. He claims they would be aided at least to
the minimum welfare level ($4,000 annually), but offers no
details and no indication of income level at which supple-
ments would cease.
4. McGovern's social spending programs would run far above
their estimated $14 billion additional cost, and would
necessarily require new taxes.
5. In wiping out capital gains allowances, McGovern is not
only getting the "rich", but also middle income families with
modest investments and capital gains profits. People who
have sacrificed to invest in the stock market and SO improve
their financial situation now find their sacrifice being
penalized with elimination of capital gains.
6. In eliminating capital gains McGovern also ignores pos-
sible harm to small investor who, over the years, has invested
in the stock market with an eye toward retirement income partly
sheltered by capital gains allowances.
7. In the end McGovern's economic program discourages business
investment that stimulates economic growth and produces jobs.
McGovera would reduce the incentives for risking capital in
investment. With less capital investment business growth would
slow and the economy sag. Jobs would decrease. McGovern,
following his economic policies, would not have to create
1 million public service jobs, but 100 million!
4
8. McGovern would cut incentives (capital gains allowance)
for risking capital -- would cause less capital investment,
less business expansion, fewer jobs, a weaker economy
9. McGovern's unstated dilemma is how to stimulate the
economy and create jobs while simultaneously killing incentives
for investment and business expansion
10. McGovern's economic proposals are as contradictory as all
his other proposals and programs.
11. By McGovern's reckoning, he would have a total of $23 billion
left over after providing income and/or jobs to everybody. That's
$23 billion he has to apply to his other grandiose campaign promises,
including a $57 billion cradle to grave health insurance program,
much enlarged agricultural subsidies, "rebuilding the cities" and
"cleaning up the environment (all these last have no price tag as
yet.)
12. McGovern says no one whose entire income comes straight from
wages and salaries will pay more taxes. The other side of that
coin is that people with the foresight and initiative to invest,
rather than spend, a part of their income will be penalized through
increased taxes. Ending the capital gains exemption would encourage
spending NOW and not saving or planning for LATER.
13. Many elderly and retired people have their savings in stocks and
bonds and rely for their income on cashing them in or on interest and
dividends. McGovern's capital gains proposal would diminish the ex-
pected amount of their incomes, penalize people who took care to pro-
vide for an independent old age, and undoubtedly force some to accept
unwanted public assistance.
14. Pension funds invest workers' contributions in stocks and bonds
and thus make them grow faster, 10 the benefit of retirees. Elim-
inating capital gains allowances would mean pension funds could not
grow as fast or provide as generous a pension. Retirees would have
less, pension and other investment funds would grow less, the cntire
economy would shrink.
5