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Times Poll and Taxes

November 11, 1987

The Times practical editorial ("Payment Due on IOUs," Nov. 3) with a suggestion for raising taxes might stumble over the Reagan-developed barrier to any raise. Measuring a tax-raising proposal against its effect on "grass-roots" purchasing power might provide a broader public appeal that could hurdle the Reagan barrier.

"Grass-roots" purchasing power means the power of the masses of people who are barely making ends meet to buy goods and services.

Some economists say that their expenditures keep employees working in thousands of manufacturing, retail and service shops around the country.

These economists say "grass-roots" purchasing power is least likely to be weakened by graduated income, gift, inheritance, capital-gains taxes and the like.

It is most likely to be hurt by consumption taxes such as sales, excise, etc.

The argument that income, etc. tax rates should be flat in order to encourage investment has been disproved. The financial industry has proved to be an effective provider of needed capital.

The "grass-roots" argument could sell the tax raise if it fits.


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