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Conversation: 647-010

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Start Date: 13-Jan-1972 11:41 AM

End Date: 13-Jan-1972 12:38 PM

Participants:

Nixon, Richard M. (President)Agnew, Spiro T. (Vice President)McElroy, Neil H.Marland, Sidney P., Jr. (Dr.)Richardson, Elliot L.Ehrlichman, John D.Engman, Lewis A.Morey, Roy D.Merriam, Robert E.[Unknown person(s)]

Recording Device: Oval Office

Full Tape Conversation Start Time: 01:21:59

Full Tape Conversation End Time: 02:19:29

647a.mp3

647b.mp3

647c.mp3

NARA Description:

On January 13, 1972, President Richard M. Nixon, Vice President Spiro T. Agnew, Neil H. McElroy, Dr. Sidney P. Marland, Jr., Elliot L. Richardson, John D. Ehrlichman, Lewis A. Engman, Roy D. Morey, Robert E. Merriam, and unknown person(s) met in the Oval Office of the White House at an unknown time between 11:41 am and 12:38 pm. The Oval Office taping system captured this recording, which is known as Conversation 647-010 of the White House Tapes.

Nixon Library Finding Aid:

Conversation No. 647-10

Date: January 13, 1972
Time: 11:41 am - unknown time before 12:38 pm
Location: Oval Office

The President met with Vice President Spiro T. Agnew, Neil H. McElroy, Sidney P. Marland,
Jr., Elliot L. Richardson, John D. Ehrlichman, Lewis A. Engman, and Roy D. Morey.

     Introductions and greetings

     Robert E. Merriam
         -Advisory Commission on Intergovernmental Relations [ACIR]

Merriam entered at an unknown time after 11:41 am.

     Report from the President's Commission on School Finance [McElroy Commission]
         -The Commission’s schedule
         -Dissent
         -Non-public school assistance
               -Paul Freund (?)
               -Father [Forename unknown] Whelan of Fordham University Law School
               -Catholic schools
               -Projections
               -Tax credits
               -Tuition grants
               -Cost of some programs
                     -Rev. William E. McManus
               -Need for action

     Nelson A. Rockefeller
          -Education plan
               -Failure
               -Prospects

     School funding
         -State functions
         -Allocation for elementary and secondary schools
         -Local financing
                                                18

                          NIXON PRESIDENTIAL MATERIALS STAFF

                                      Tape Subject Log
                                        (rev. 10/06)
                                                               Conv. No. 647-10 (cont.)


          -Source of funds
               -Income, sales, property taxes
               -Local expenditures of funds
                     -Supreme Court
                           -Warren E. Burger
               -Federal government role

An unknown person entered at an unknown time after 11:41 am.

     Refreshments

The unknown person left at an unknown time before 12:36 pm.

          -Federal government's role
               -Amount of aid
                     -Five-year period
          -Urban areas
               -Efficacy of grant programs
               -Deterioration
               -Young people

     California and Texas decisions
          -Impact on school funding programs
                -Property taxes
                -Examples
                      -San Marion County
                           -Compared to Apple Vally
                      -Minnesota
                -States
                      -Equity

     State funding
           -Federal government
           -Local school boards
           -California
                 -Watts
                 -San Marino
           -Local government vis-à-vis states
                 -Delegation of authority
           -New Brunswick, Canada
           -Hawaii
                                        19

                    NIXON PRESIDENTIAL MATERIALS STAFF

                                 Tape Subject Log
                                   (rev. 10/06)
                                                               Conv. No. 647-10 (cont.)


          -Handling of funding
     -Oregon, Ohio

Taxes
     -Ehrlichman’s talks with McElroy
     -Engman's work
     -Value Added Tax [VAT]
     -The President's conversation with John B. Connally
           -Tax reform
     -Property and general taxes
           -California
     -Sales tax
     -Property taxes
           -Regressive nature
                 -Sales tax
           -Possible substitutes
                 -VAT

Prototypes of programs
     -Revolutionary approach

ACIR
    -Purpose
    -Revenue sharing
    -Federal support for education
    -Schedule
    -Congress
         -Revenue sharing, welfare reform
    -VAT

State and local perspective
      -Agnew’s experience
            -County government
            -Tax reform in Maryland during Agnew's tenure as Governor
            -ACIR
            -Changes in intergovernmental relations
                  -Effect of broad-based tax such as the VAT
                       -Revenue sharing
            -Private schools
            -Approach
                  -Special revenue sharing for education
                                             20

                        NIXON PRESIDENTIAL MATERIALS STAFF

                                    Tape Subject Log
                                      (rev. 10/06)
                                                             Conv. No. 647-10 (cont.)


                         -Public relations
                    -Feasibility of VAT

Property tax
     -Assessment rate differences
     -Boston
           -California
           -Newark
     -Sales taxes
     -Relation to other taxes
           -Income taxes
                 -Graduated
     -VAT
           -General revenue sharing
           -Equalization of education costs

Bill in Congress
      -Changes

Total tax picture

McElroy Commission, ACIR
    -Departments of Treasury, Domestic Council and Health, Education and Welfare
          [HEW]
          -Revenue sources
    -Study of equalization efforts
    -State, Federal roles
    -Equal educational opportunity

Property taxes
     -Different kinds
           -Assessment factors
     -VAT

Government decentralization
    -Administration goal
         -State responsibilities
               -Board of education
    -Use of taxes
         -Broad-based tax
                                      21

                      NIXON PRESIDENTIAL MATERIALS STAFF

                               Tape Subject Log
                                 (rev. 10/06)
                                                           Conv. No. 647-10 (cont.)


HEW formulation

Projections on funding
     -Court decisions
     -Tax funds
           -Sources

ACIR
    -Property taxes
    -VAT

Property taxes
     -“Circuit breaker”
           -State limit on amount elderly pay
                 -Conference on Aging
                 -Wisconsin
           -Possible federal effort
           -Treasury Department, Domestic Council

ACIR
    -Additional staff
    -Texas
    -Congress
         -Edmund S. Muskie
    -Schedule
         -Study of VAT

Special revenue sharing for education
     -Possible public impression
     -Funding
     -Property tax
     -State role
           -Neighborhood and district role
     -Tax base
           -Relationship to use of money
     -Congressional hearings
     -Roman C. Pucinski and House committee members
           -Illinois
                 -Chicago
                      -Sales tax
                                                22

                           NIXON PRESIDENTIAL MATERIALS STAFF

                                       Tape Subject Log
                                         (rev. 10/06)
                                                                       Conv. No. 647-10 (cont.)


     Executive Committee of the ACIR
         -Further study of VAT substitution for property tax
               -Schedule
               -The President’s instruction
                     -Priority attention to school funding
                           -McElroy Commission

     Federal Reserve Board [FRB]
          -John E. Sheehan
               -Background
          -Composition

     [General conversation]

     Focus
          -Pilot programs
          -Local government control

Agnew, et al., except Richardson, left at 12:36 pm.

     Inclusion of portions of Richardson’s statement in State of the Union speech
          -Forthcoming radio talks by the President

Richardson left at an unknown time before 12:38 pm.