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If we were in the middle of your remarks or at the conclusion, I forgot.

I forgot.

We were at the conclusion.

These numbers are all comparative with one another.

The economy continues to be issue number one.

Vietnam, pretty much issue number two across the board.

Bear in mind that this is people responding to the question, what problems affect the nation?

Not themselves so much.

We'll look at why on that question.

But the problems that affect the nation.

The economy, Vietnam, and then over here, scat.

But in this latest poll, race relations next.

Drug addiction, pollution, crime, poverty and welfare, and unrest.

And then going the way out, can I ask you, are the March, June, and August also Harris schools?

Those really are not too damn relevant.

Those are now.

What I'm getting at, John, is that I cannot see, say, Vietnam going from 25% in August to 47%.

No, no, that's what I said.

You have to divide this up.

These numbers don't relate to each other.

These numbers in this column relate to one another up and down.

But you can't go across this line and say it jumped from 25% to 47%, you see, because they're in different settings.

Now, this is again the Harris poll, and that's what are the most important issues to you personally?

And you get an entirely different constellation of issues.

The economy remains number one, but the atom drops way down here.

Second is taxes, third crime, very closely followed by the education of healthcare and drugs, and then the environment, and then Vietnam, and then race and welfare, bringing up the rear.

Now that's what's affecting that individual.

The poll was taken two ways, and they asked, how are things in the country, how are things in your neighborhood?

And you get different responses as those questions are asked.

The neighborhood, everything's pretty good.

The country, everything's going to hell.

And so it's a matter of perception of the individual.

Now, I'll come back to this, but I want to call out the fact that taxes and education rank in the top four here, and that bears on what we'll be talking about as to this specific proposal.

Okay.

The economy is an issue.

A constituent Harris coal has been running since early in the summer.

Our negative rating is steadily coming down.

The latest reading is right in line on the down trend.

Our positive rating is steadily coming up.

Okay?

And here are four projections by the Cleveland Trust, by the Troika, by an independent research outfit, and by the Horton School of Finance on where we're going to be in unemployment rates out in the future.

Here's the beginning of 1973.

Here's where we're going to ease through our budget.

for fiscal year 73 and here's the election out here now you'll see the further out you get you get some very wide spreads as near as i can tell the average is right about in here around five and a half but the average is taking a very wide spread interesting three out of the four states i don't want to be training down

This one, the Cleveland Trust Accomplice says that we will have bottomed out by the time fiscal year 73 begins, and between this summer and the election, we'll be trending very sharply back up again.

The rest of them staying home will be coming down at some rate.

Okay.

This is a stat list of the critical domestic issues as we see them for the calendar year of 72.

Personal income, jobs, taxes, inflation, and an aspect of research and development that's job transfer in the future.

crime and drugs, health, veterans, aging, fire and rural development, education and under-education, the questions of school finance, parochial school aid, vocational education, pollution in the environment, and the whole question of international competition, the domestic side of that thing, antitrust, taxation, and the marketing of research and development.

Now that's obviously a gross shopping list.

Some of those are much more important than others.

Here are some new programs that we've been studying as possibilities for the first year.

The one we'll talk about today is tax reform and real estate taxes, education and parochial aid, a national growth policy affecting rural development in new cities that will involve an urban concept, a couple of programs

on jobs, R&D being the most notable, some continuing programs in pollution and environment, parents' education, and some programs affecting classical education.

I mean, this is something new.

I thought we were already doing that.

Well, we're doing some, but we're not focusing on it.

At times, the research is developed, and the concept is this.

If we say that our actual strategy in research and development is to develop a certain kind of technology for this country that's going to be able to compete internationally, so that out there five years or six years from now we're going to have a certain kind of technology, then you have to ask, what kind of people are going to master that technology?

What do they have to know?

How do they have to be trained?

We don't do any of that kind of thing in vocational education at all today.

We're still training people for tech jobs.

We're training them for two-punch operators and things of that kind, following the duck instead of leading it.

And as a result, we turn out a lot of people for whom they're not jobs.

So this is an entirely different kind of an integrated approach to career education.

This is the retrospective wisdom.

programs and proposals that we have in the Board of Congress now, some of which go to this list.

Some places show that we're partway on some of these issues.

I won't take any time for that.

We can come back to it if there are any questions.

This is a part of this more recent poll on how people think we ought to be spending federal money.

The question was, do we increase or decrease

federal expenditures for these problems.

This column is the people who said flat out we ought to increase.

This column combines those who said we should decrease or else they're not sure.

Drug abuse, 85 to 15 for increase.

Crimes, 78 to 22.

Pollution, 77 to 23.

Medical care, 77 to 23.

Aging, 77 to 23.

Education, 72 to 28.

Hold our military strength to the equal of the USSR, down to 56 to 44.

Housing and welfare.

Now, focusing from here over to education, what do people say about education and taxes?

They say education, the public education is a serious problem, 68 to 29.

They say taxation is a serious problem, 86 to 13.

Of the people, for the 86% who find taxes to be a serious problem in their lives, 35, a third of them say it's because their tax money is wasted by government.

A third of them say that it's a serious problem because prices are going up and taxes have become unbearable when prices go up.

Interestingly enough, the other third of them say

It's property taxes that they assign as the reason that taxes are the biggest problem.

Now that ties to, of course, what we're going to be talking about.

On another question, what kind of taxes do you dislike the most?

Well, local property taxes lead the others by 5%.

Then local sales taxes, state income tax.

Federal income tax, of course, down there at the bottom.

It's 9% of the income taxes.

Now, six problems to which this specific proposal is addressed.

Property taxes are too high.

We want to get aid to parochial schools.

We want to innovate, evaluate a tax for the United States.

We want to figure out a better way to finance primary and secondary education.

We've got an equal protection dilemma because of the California Supreme Court case which struck down

conventional mode of real property taxation to support schools is unequal, and of course, we've got federal budget problems.

And so, one additional fact before we get into this.

50% of all property taxes, state law, now support education.

Of those taxes, 46% are on residential property, 54% are on non-residential, which includes agricultural farming.

Okay, now we'll start with the 46% of the dollar value.

Yes, that's our dollar value basis.

Okay.

Now, I might explain getting into this.

This proposal is hooked to education.

The other domestic leaders as problems are crime and health.

Neither crime nor health account for as much global taxation by substantial margins.

Education is far away the most heavy global taxation expense item.

This proposal, which is directed to those six objectives, involves taxing all taxpayers at the federal level and at the state level.

the federal level through a value-added tax at the rate of 2.5%, which would raise $12 billion.

That $12 billion will be sent to the states as matching money on a $2 of state money to $1 of federal money basis.

That means that the states would have to raise an additional $8 billion.

We would require as a condition of this grant of $12 billion that no state property tax

be used for education, that no local property tax could be used for education, and that a $400 maximum per pupil grant would come to the state through this device.

Now, the only state that will affect is New York, where they run about $1,320 a pupil.

But it would not affect New York greatly.

The thing we're concerned about is that the states seeking this leverage would immediately up their allocation to education in order to attract additional federal dollars.

We have an open-ended situation.

We've got to close the end so that we know where our maximum federal costs are, and that's the reason for the limitation.

Here comes $20 billion to the states, eight that they raised, 12 that we didn't.

They send that $20 billion down to the local schools, private and public.

And the reason I say private is that the money comes to the states on the basis of the number of children that they have, rather than the number to attend public schools.

So that money is sitting there in the states, and we pay the cardinals, the business, fellas, there's that money.

And it's available.

You've been much more effective with state legislatures than you have with the Congress.

go to your state legislators and get that money for parochial school support.

It'll come down under such conditions that that's a permissible use of that money.

It goes to the local schools, and the local schools under these conditions and the local school districts and the tax entities are required to repeal their real property taxes, which go to the support of education.

Sir?

Yeah.

Are you talking about operating expenses or physical plans?

We're talking about operating expenses.

Okay.

It's a great deal of the cost of education versus the physical plan.

Not that much that goes contrary to these suggestions over here.

No.

If it leaves the physical plan, it's not good.

It's simply not going to be a problem because we're going to leave enough taxing capacity in the local, in the local distance.

that they're gonna be able to, they're gonna be able to raise money for capital, capital construction and still give the taxpayers a $20,000 rebate.

On a, on a sequestering out proportion of, of what goes to operating and what goes to capital construction.

So the way you, you're full of visions there that you need to start with.

That's right.

Now, this is on the basis of the 2.5% benefit you add, which would raise $12 billion.

Let's take a look at another pattern at a higher rate.

That's a 4% benefit you add.

That raises $19 billion of federal money, and that gives us a $7 billion spinoff.

which would be used for alternative budget use.

Now, we think you've got serious political problems in using that for anything but education.

Education is the magnet that will pull this thing through if anything does.

But the fact is there's nothing in excess of six million dollars of federal aid to primary and secondary education already in our budget.

So we could say that all federal aid to education in those categories would be covered by that U.S.

And that would maybe give us some $6 billion of relief, or almost $7 billion of relief in our budget.

Now, this is a very small

moving over that way if you would, this is a very small set of numbers, but what they chose is that at 4%, a pathway of four, under one version of this, this has a net better off in these lower income brackets.

Here's at $1,000 up to $9,000, they're getting money back.

They're paying a little more at 12.5.

They're paying $36 a year more, $80 a year, $20,000, $351 a year more, and $37,500.

That's at the higher number.

That's at the 4% value added.

And that money, they're not paying out.

in writing a check to the county assessment.

They're paying that out in value added, which is to say, in the price of goods purchased at the store.

The price of goods goes up 4% is about what it amounts to.

And they net out because they get a substantial rebate back from the federal government as a deduction on their income tax.

Or in the case of those who don't pay income tax, they actually get a check from the government.

in order to solve the regression problem.

Here's that you had a 2.5%, you see the same thing, the same brackets are getting money back.

Here they're paying $29 a year more, it increases cost of goods.

Here $111 a year more, and $37,500.

Now we'll give you these savings notes if you don't want to look at them in detail.

But they stand for the proposition that on the computer runs,

People are actually going to be better off because they're going to be getting these combination of tax rebates and tax deductions and refunds.

So they have even though it looks on the surface like it's a tax increase.

This is another thing that, can I just ask about it?

Yes.

In the chart that you have over here, the, uh, as I understood it, it was a wash in terms of, uh... That's right, it decreased that.

So the community as a whole isn't affected.

That's right.

So what you're showing is that this is a way that redistributing income, income-reducing income system, more progressive than on the other side.

That's correct.

That's right.

It is a minimum income redistribution in which school costs, in effect, are borne by the higher ranks to a greater extent rather than by the regressive real property tax.

Because as it is now, schools are supported heavier by people who can least support the support.

It's a particularly cogent argument with people who sit there and fix their jobs and see their money going into school taxes when they have no children.

That's a thing I don't know what your experience is, but when I talk to old people, that's one thing that's really great.

Now, we have two other tables showing variations of this at different rates of value added and on different bases.

One option is that the income tax credit on account of the value added in order to overcome regression would be at an increasing scale to benefit the blue collar worker in the middle here instead of the $9,000 bracket.

Another proposal would be

that he simply is treated on a flat rate.

This one has to be at $96 flat, regardless of his income.

And you get a different result when they're in this column.

I'm inclined to think the progressive one gives us more political flexibility because we can focus then on the specific classes of people that we want to see benefited the most.

Here's one that talks about some states we're interested in.

California, Illinois, New Jersey, New York, Ohio, Pennsylvania, and Texas.

Taking the average taxpayer in those states and taking a 4% value-add.

The net result over here for those states, I don't know how we're gonna do this to get it all on the program.

Let's slide it over a little bit.

By and large, everybody gets money back except three states.

And the three states are New Jersey, New York, and what's the next one, Ohio?

Ohio.

Yeah, Ohio.

And they're by four-tenths of one percent, four-tenths of one percent, and one-tenth of one percent.

Very nearly a wash in those states, and a substantial return in Arizona, a substantial return in Texas, six-tenths of one percent, and the rest of it more or less is a minimum.

It's very nearly a push for that average down.

Okay.

Uh, let's have them both, both for that one.

Yeah, leave that one and take the next one.

What are the benefits?

Well, it gets us into the value-added business.

Probably on the only basis that it could get us in, if we really want to get into the value-added, and that is with the push of the education lobby, the push of the people that aren't, uh, the people with real property taxes are too high.

It solves some of our equalization problems.

A California case, it does lower real estate taxes.

It can't be structured to benefit the blue collar.

It repeats our commitment to hate parochial schools.

I'm probably the only instance that we have ever done it.

It tends to upgrade education in many areas, not all, but many.

Because also, I should have said, it gives an opportunity for local enrichment so that Beverly Hills and Grosse Pointe and places of that kind can add to the money going into education in their community, not through real estate taxes, but through other forms of revenue, and thereby getting their program more enriched than perhaps a community that is not able to raise that extra money.

It doesn't deny them the opportunity to do that.

And if we go the 4% route, we have $7 billion to pump into the budget.

Disadvantages, and I think probably the cardinal disadvantage, is the headline coming off, which is we're proposing a new tax in the morning.

Laker has traditionally opposed a value-added tax, probably would more or less consistently do so.

It forces the states to raise $8 billion in new taxes.

If we do go the 4% route, arguably, we're replacing our progressive income tax with a more progressive annual added tax for those things that we're not spending federal money on to the extent of $7 billion.

It couldn't be told that the program is solely designed to eliminate school property taxes because, of course, we'd be replacing federal income taxes with the value added tax.

But I think number one is probably the essential political issue that's involved in this proposal.

There are doubly others, but that would seem to be the natural problem.

That's a very, could I add to that before you leave?

I saw one on each side.

It seems to me, perhaps you have the surprise to inaugurate that, but it seems to me a big benefit is that we get a tax into place that raises a lot of money

at a very low marginal rate, that is, you're talking about rates like 0.5%, 4%, 5%, and so on.

You get a good inflow of money for that, and you don't get discouraged in the economic system the way you do when you have a corporate tax of 50% and personal income tax rates there.

even down high, with the impact that has on people's attitudes toward what they can do.

So it seems to me that's a big benefit.

On the disadvantage side, in here, on your issues with people's signals of inflection is certainly one of the big issues.

And you had a moment of time when you were in business in which you would raise prices by 4%.

Yes, the I would go up, everything would just go up, so you'd have an inflation-sized kick.

But it's an inflatable kick in a sense.

In other words, it would be hedged about with stories and explanations that this is because of, it's a hidden tax, and so on and so forth.

I assume that from the revenue produced, that you have eliminated the food and drugs.

What eliminations have you made to calculate the revenues derived from 2.5%?

Food and drugs are not eliminated.

We attempted to take care of that by the credit schedule, which in effect gives the credit per person of some $600 that we spend each of the year on the family.

Now that's an alternative in terms of working out the details of eliminating food and drugs.

Your department would prefer not to go that route because the more exemptions you get, the more complicated it will be to administer.

So no $600 in individual exemptions?

Those exemptions get out of the basic food and drug department.

That's correct.

It was $2,400.

Unfortunately, it's nice to have that check roll on back, but it was poor people all over the office with the administration.

John, I've got some worries.

It's a lot lower in real estate taxes.

It makes it possible to lower them, but does it now guarantee a mandatory redeeming of the whole property tax, of the real property tax, to the extent that it supports education?

But you still, as I understood your answer, John Mitchell, allows it for capital approval.

Yes, but here's the thing.

It's a fee debt.

No, it's a fee debt, though, Cap, because to the extent that it goes to support operating.

So there's a moment in time when it's no longer on the books.

There's no question about what they attached real estate to by police uniforms and picture of roads or street lights or anything after that.

But there are then.

Excessive political decisions that have to be made to reimpose real property taxes.

And to the extent that that's difficult, or to the extent that it occurs, there's a political accountability at the local level.

You would require a full review of all property taxes to qualify as it relates to specified expenses.

But a lot of states do not devote

very much of the, uh, real, well, they bought a substantial chunk of it, but a lot of other things.

So they do.

It wouldn't be every page.

It'd just be modified, and they have 16 pages.

It'd be a pro-tanto repeat, whatever you want to say.

But in fact, it is a substantial amount of money.

In most communities, upwards of 50%, about $20 billion of existing property taxes in total of about $38 to $40 billion a day, so it's over 50%.

But a large chunk of that is business.

Well, I would probably mention that the $48 billion in his property, his education, would be repealed.

How does the ratio of their debt service to their operating figures?

Debt service is included in these operating figures.

You don't know what's what?

It is something in the state of less than $5 billion of the difference.

$5 billion of the planning budget?

No, $4 billion of the...

Oh, the debt service?

Which will remain as a property of evidence.

It would not under this rule.

It would have to, because you can't... You can't...

Wait.

You can't get lost in the bond, John.

You can't... Is that in your opinion?

That's not a covenant, John.

It's a contract, which I'm sure that will be enforced.

They could always go back on the malpractice insurance of the firm that wrote the opinion on the bond.

Well, we're not good for him until the 25th.

If you break out, how much is involved in just personal property taxes on the residents?

And that was what I think I .

46% was .

I would suggest that you look at the debt service department as the same as your operating expenses, because this will continue on as a part of your department.

That is a good point.

I don't think it's a good point.

Well that completes the presentation.

I think I've covered the ground.

There's a special issue here that has to be grappled with.

Of course, if you want a flight, you'd like this to sail out on next year's speed.

It's a great big call, and it's quite a turn.

You lift the advantages there, you say repeal property taxes.

That doesn't quite tell the whole story, it seems to me.

You are imposing a new tax throughout.

How about you repealing, you're forcing the repeal of tax that is the most unpopular tax in the country today.

because these are political people, really, who are opposed to these school taxes.

They're just going crazy.

They're rising at the rate of between 8 and 14% a year in most communities.

Well, and as a result, most of your bond issue proposals are being turned down.

The greatest thing is they add to the property tax.

Now, this would divert state taxes.

That ain't been in just state taxes.

It would almost inevitably be income.

Because the sales tax base with the value added that the states are using would be largely eroded.

You can't have a 25% sales tax.

So you would drive the state taxation into income tax.

Has anybody made a study of where these additional non-profit taxes are going to come from in the states?

With all of their limitations?

It would have to be...

I don't know if that's...

I don't know if that's a sensible...

I don't think that's a sensible, very precise study.

I think that's right.

that you would force states that don't have income taxes now to move to that.

And my worry about that is that, in a sense, that's, to some extent, our own decision.

And in the case as to who benefits and who is hurt,

the people who come into the post line so that the people who would be hurt are to consider what is in our constituency or whether we have to appease them.

Well bear in mind our constituency in that sense is not really bothered too much by real estate taxes.

If you're talking about the $15,000 a year, they might not.

They might not, but they don't feel as acutely as those blue collar guys in the middle.

This is premised on your retired person, the aged person, the blue collar guy in the $7,500 to $15,000 rack.

It's premised on the proposition of investing.

I agree with you, Kevin.

In defense of it, it does attempt to remain ground in the constituency like it did on our side.

Yes.

In other words, it does .

An increasing number of that road is rented to a lot of blue collar.

Yes.

Retired blue collar.

We have two other alternatives that the Justice Department has given us that are constitutional, which would become congressional proposals.

that we could lay out there.

And once the form of tax credit, they are, they're probably not going to go anywhere in Congress, but we could put them up there and be for it.

Now, it looks good, but what kind of tax credit?

Is there a tax credit that could be constitutional?

They tell you that there is, as long as it extends to all private schools, then there is a tax credit formula.

One of the problems with it is it would cost us a billion more if it were taxed.

And you'd be buying those boats at a high price.

Billions wouldn't get served.

As John knows, what would happen if you left out non-residential property?

you wouldn't have to impose a requirement of $8 billion on locally-loved fruit.

That's exactly where the difference comes.

That's right.

It would be known as state taxes.

State taxes, unfortunately, the imposition of income tax, the states don't have it.

I should have mentioned that as one variation on this.

That's the principle of the cost tax.

The only possible disadvantage I can say to that is you wouldn't be reducing property taxes

from agricultural farmers in the Midwest where he really, California and California as well.

But I think I'd rather, that agricultural property is all black and white.

And frankly, the real problem with this is the vulnerability of this in repeating taxes.

The property taxes, at least by the case reports, is on commercial.

I just want to put you to think that you have a big corporation out here.

The United States people come down and buy 12,000 acres of land on the ship.

The Harriet County Student District has to repeal all the taxes.

Well, the point is, if you have a model, as I understand it, if you're considering a model,

We continue to do that.

The figures on the average taxpayer is already taken into account on a portion of the project that increases state taxes.

a proportionate income tax, or a little bit of proportionate income tax.

So those net minuses we have down to 9,000 or 12,000 level, whichever that formula is, you can already take that into account.

If we don't raise state taxes by $8 billion, by not reducing business property taxes, we will get even greater minuses within that area, and they'll go up to a higher income level.

So we don't have tables on that to show you today.

I just really think that would be a more defensible position to be in.

Reveal them on residential property and not force the states to raise their payments in taxes by some other means.

In terms of the city's part of doing this whole thing on a credit basis, in other words, instead of the payments going back from the value added tax,

to the states, gives each individual taxpayer a credit for either some payments he's making for a non-public school or his property taxes.

What I'm driving at is, he'd get the benefit of that immediately in an election year, sending this to the

rather than wait for the states to roll back or the local communities to roll back, which is kept in one sense, they might not do in the proportion they might do.

My argument about that is that I don't think the president can clearly identify himself with the benefits to the individuals.

This is a tax remission and raising interest and so forth.

It's got one where nobody's credit for it.

Congress takes most of the credit.

If the president on the other hand proposes a system

that forced local governments to repeal the school tax.

This is something that is ongoing.

It gets de-taxed for all next year.

Everybody has to talk about it.

Everybody, to get this federal money, the local students have to repeal the tax.

It becomes just consciously ingrained in the minds of people.

Who did this?

Now, if you get to it on a tax-revision basis, on a pro-tax basis, they get credit for over bills.

or some other Congress where they could get word recently, but I don't think they will on this kind of approach.

I was really thinking of when they get it, the difficulty with this is that they're going to start paying the taxes and excuse people, assume that's not true, before they begin to get the benefits and lower the focus.

Well, that's what they're saying, what they're really talking about.

As far as next year is concerned, it's an issue.

The next conference is not going to pass any proposal.

It's not going to pass all their reports.

It's not going to pass this.

So let's understand that basically we're talking about an issue here.

On the other hand, we're talking about an issue here.

So my view is that if we go in this direction and make this as simple as possible we can so that the average guy in the city will wear it more or something.

And then it's up to the Congress and the Senators to sit down and see the difficulty.

I mean, I'm just talking about the difficulty.

People want welfare reform.

As far as our constituency is concerned, almost anyone that we would hope to be able to get.

In other words, the people, the 90% of the people are not on welfare and pay taxes and support their concern.

What they want in welfare from the farm is not family assistance.

What they want is work-required.

And that they can understand and make more of these lazy, lazy kind of work.

So welfare reform is much an issue.

It is much a positive issue.

It is definitely an issue now.

That's a fair expense, which is as important as what you're forced on them.

The offer is bad, and so let's do something about it.

What we're offering is better.

On the other hand, in terms of the average job, in terms of what's in it for him, believe me, family assistance is a dead loser.

Work requirements is an indirect winner.

That's something I've noticed in looking at the politics of it.

Now when you look at revenue sharing,

And we would have to group up the organizations here to hear some things that are definitely quite right that ought to be done.

But as far as that average guy sitting there listing those things that are going to affect his budget, both are losers.

particularly the revenue sharing thing.

Government organization is basically, and revenue sharing has the advantage of all the reform too, of hitting the reform feeling that lots of people have, governments and all of the shape and things.

But looking at revenue sharing, mayors are interested in it, the governors are interested in it, and the county officials are interested in it, and

all responsible people who worry about the next year's American government, who's going around and so forth.

As far as that average fellow is concerned, he doesn't know what in hell it is.

And you're not gonna, you're gonna hold them for it, but it doesn't go up on any list, if you say so.

So to make people, it's gonna get impossible for a director to deal with.

Uh, it's just, it's the right thing to do.

You understand?

All that we've done, uh, all that we've done.

And government, we are concerned, of course, just like we did what we did on the post office.

God did all that we've done.

The government's a hell of a mess.

And we'd run it a lot better if we had it.

In terms of, and we'll mean something by having, we've got to recognize, as we say, in regard to the welfare department and revenue sharing and government organization, even though we don't expect any of it to get through except in very ministerial parts, they have certainly useful political purpose in having our opponents debate about it.

Because they're not gonna do that, they're gonna be bitching at us about something else.

So that's it.

Now I think all that in order to get this in a proper context, what we're talking about here is not something that the voters next year before the election are gonna say, gee whiz, this has been great.

We're gonna get our property taxed or less because of what this administration has done.

That's not gonna happen.

Don't ever go to them.

I mean, no Democratic congressman, it's right in my, would never give us this.

And the better that it is, the less likely they are to give it to us.

So, under the circumstances, if we could package it in a way, package it in a way, it's very simple.

And so, well, just take a matter like parochial schooling.

Now, parochial schooling is a double-edged sword.

There's a hell of a lot of people in, you know, like all those great countries, they could do it.

about the Catholics, like the Ku Klux Klan thinks about the Catholics, or is supposed to think about them.

I don't know.

I think they're going to skip this.

Anyway, it looks like the Ku Klux Klan thinks about St. Kitts, not blacks, and it looks like so-and-so.

Where you come to the situation, though, is that, with regard to paroxysms, you have this point.

If you can find a subtle way

to get out of a problem.

First, you're getting out of a problem that needs, desperately needs, some sort of solution.

And one where if you continue this deterioration, they're going to go out of business.

Those 5 million kids are going to go into public school.

That's an increase of $404 billion a year, public school costs, in addition to $4 billion in the plan, in case we get into all questions that happen.

Because there will be, they will continue them over some period of time.

But nevertheless, it's a very related, by the occurrence in putting it, straight code politics.

Straight code politics.

If we can do the parochial school aid in a way that will not get every Baptist and Methodist and Presbyterian fundamentalist out of race and holy hell in other states, it would make more votes for us.

And then, welfare reform, regulation, government reorganization put together.

Because you can get to something that goes right into their gut.

Here they are, you know, I mean, they, uh, they've heard better than we're saying, you know, our Catholic friends believe in them, and that's it.

They want their kids to go to these schools, and they pay off this money.

They remember my sister so-and-so, you know, saying that, and they were ready to do something.

They did confess to the Catholic system, and it was all over again.

It's a very pleasant system to be a member of.

I think that is many.

Being one of them, I think, is a very sympathetic thing about Catholicism, for a variety of reasons.

I guess I know that that's a potential winner, provided we can run the sword that cuts the other way.

uh, I put it this way, there's a hell of a lot of people that are gonna, would, could do, give them something here, greater than before.

There's a hell of a lot of people that would help us.

Now, let me, let me, since this is basically political justice, and the reason that I did this, and I know that this is one that, that, I know that, I know that ECW is totally opposed to maybe private schools being done.

I mean, it's totally opposed to it.

And I know that.

I know why that is.

But if there is something in this feeling, you ought to remember that here is a constituency that is potentially one in which we can make points.

Who are they?

They're Texans.

There's a hell of a lot of liars.

There's so on and so on.

Actually, assuming that the candidate is a Teddy Kennedy, a lot of the captives is one of our boys.

We go for it.

Everybody's been there, according to.

Chuck, Greg, I told you apparently this thing, the Catholic appeal, these committees have gone down.

It's a strange thing about the, that in terms of appealing to what we call blue collar Catholics in this thing, I happen to appeal more to

have any of the potential Democrats, mainly because they all know that I am an intellectual, and that I college, and that I .

And the very fact that we are, that our Democratic candidates are all considered to be running around with their votes and all that sort of thing, hurts them desperately, and it frustrates them .

And the hard hats could be with us.

And a hell of a lot of those are .

What I'm trying to say is this.

In talking about politics, there are two things we can consider about all these things.

One.

It's a good thing to put something out, like Revenue Channel, or World Revenue Forum, or government reorganizations, so they can have something to talk about.

So say, well, we're in for something.

And then we guess about that other than something else, and hire opponents to.

On the other hand,

There is a task, or where we can't, we can get the dough out of it, of finding also something that directly appeals to an individual that he can see in terms of what it's going to mean to his family question.

or something of that sort, even though it was still going to be a game.

This is the real winner.

Now, that's the reason that I told the John and the boys to go forward with these models.

They said, it probably can't be done.

I agree with them.

The problem is raising taxes, they had them.

And the other, they would say, oh god, you're going to raise taxes, and so forth and so on.

But I must say that what we're looking for here is, first, let us understand is and is not a program.

That's true of all the things we're going to be talking about.

What we're looking for here, too, if we can, is to find something that we do not have yet in any of our programs.

And I think they're damn good programs.

And I should already listen to my hand and the rest of it.

No greater reforms ever been offered.

The hard work of Tinker's dad in terms of appealing to that average guy about something wasn't it for me.

uh the uh it isn't black you know it isn't like the like a program if you've got a program that says well i'm going to cut your tax if i still like it that everybody understands sometimes that's why i'm using an army case it's an army that overrides all these because it's involved jobs prices we can see that pretty directly and of course that comes first and foremost with all the rest so so what we're really looking at is not unless we can well

If we could find something, if we could find something quite legitimate against some of his visions in terms of basically his most selfish motives, which is what the hell is he going to get out of it, then it's worth trying, too.

That's my analysis of politics.

I thought of the first...

Rather than, I don't know all the other things.

There are other reasons.

First, because of trade.

And second, because politically it helps to be debating about some of these, you know, these esoteric things.

But rather than debating about something else, you finally come down to it.

Well, look at this.

I'm trying to look back at the awards that win elections.

It's terribly up there.

Lower taxes over children.

It's a winner.

Now, there might be racist taxes, of course, but definitely lower taxes.

But all we do is to say,

Be responsible.

We're going to run a very responsible government.

Always do the right thing.

All that stuff.

And, uh, that in terms of, uh, of, of, of, basically, uh, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of, of,

uh they become less and less devoted to old values less and less and more and more

They're looking for a crutch, a safe-nose advantage and so forth.

Blessers with dignity and individual responsibility and direction.

But out there in that country, there is still a majority, a very big majority of people who, thank God, aren't quite that well-educated.

people who have not been spoiled or whatever you want to call them, but who still have some basic

And it's those people that, in terms of our domestic program, that we have done very little for.

That's what we call it.

Well, why is it that we do reasonably well among them even now?

Even now.

And the curious thing is we do reasonably well among them.

Only because of the foreign policy issue.

And because sort of deep down they sense that if I am not one of the liberal clack that they're... That's just what he wants.

I think you've identified it absolutely correctly, Mr. President.

I think the added reason that these people identify with you is because of your own personal characteristics as well.

I think finding the issue that provides us with means for solving one problem that is of great concern to at least a third of the Catholic families in America who have children in broken schools is a very, very solid issue to attach on to next year.

The beauty of this plan, I think, is that it does it in a way.

I think it does it in a way.

And that's why I asked the credit question.

I think it does it in a way that does not raise the direct issue of aid for the students.

My only concern, John, and the reason I asked you about credits, is if you do it on the direct aid from the federal government to the states, do we have any way of ensuring that it really goes to the United States?

It's a problem in a sense, but certainly the parochial people have had enough experience with state legislations that they know that in those, what is it, 11 states where it makes any difference.

And if they don't have the opposite of the Bible Belt, congressmen, for instance, who have to go against it here, and it's precluded from our getting out there, of course, another way to slice this off, of course, is Mike Griffin, Mike Griffin, by the way, another way to slice this off is just to make it straight out.

As George Johnson suggested, the cost of the bill is forward, which is everything that it takes right out of it.

We don't know this, but this is so vacuumed.

say, well, there's tax credit and so forth for this particular problem.

And that does raise the problem, which more directly, however, of the other cutting edge of the solar.

So you'd have to double that number and unfortunately you'd have to hang it up in your budget.

And so that becomes kind of on us at that point.

I think, well, without, let me say to you, I've got to consider this, John, because, I mean, we don't want to miss the other one, because the 200, and it doesn't have to be 400, the 200 is enough to show we care.

That's what we're reading now.

100 state money in the trophy of school specialized or not all that much.

They wouldn't throw it up to you.

They would consider that a lot of money right now.

It's just the beginning, and that's what I meant.

And the principal.

And then you could talk about that year blue in the face.

You're talking about Catholics who are just looking across the biggest view facing the country.

And with three exceptions, the Catholic percentages are approximately the same as the Irish.

The exceptions are Vietnam.

They're more concerned about Vietnam than Irish.

They're more concerned about, well, they're less concerned about welfare, and they're more concerned about taxes.

Otherwise, they're .

6-8 years ago was a major issue.

But the cost of campus lives and so forth, interest in education, is that a part of that?

I think the answer to the remains of education for the thousands of dollars have not been properly spent for us in Manhattan.

That's what the issue of education is.

It's a two-edged sword.

The minute you say, I'm concerned about education in my community, you're saying, I want my taxes to go up.

Yeah.

And they're locked up.

And they like better education.

They like better education if it didn't have that other, if it didn't have that other.

And also, we also, we also have a responsibility, you know, we're giving people responsibility.

Education needs to know.

I just want to say that I think they're a better institution because they think that's what they're supposed to say.

Better education is not a good issue.

I think you'll have a lot of good issues out of this that will overshadow education.

We can find a more realistic, simplistic approach to this, whether it be the parochial schools or property tax reduction.

I think that's a hell of a lot better than going through this, which would

and raise all these others, particularly when you started imposing the requirement that legislatures have to raise, what is it, $8, $10 billion?

I think that's unrealistic.

I think state legislatures are the president.

You ought to go for that.

Just to set that in perspective, last year, which was one of the largest single years for tax increases on the states, the states increased their taxes by even dollars.

So in other words, you could probably see how that limits the taxes in this year.

Mr. President, could I just read you two paragraphs out of this report, the show report, on the Strogan School thing?

Because it's very interesting to put it on a technical basis.

Because of this study, special programs were conducted and requested federally in parochial schools, which were quick-financed with no more than 2% selecting interstitial problems.

The results of the direct question on the subject clearly showed that a majority of 51 was 38, and it is why we would favor such age.

Among Catholics, support for federal aid and insurance schools rises from 72 to 22.

Support is the highest in the East and Midwest, in the cities and suburbs, among the 21 to 49 age group, among the 10 to $15,000 income group, among union members, Democrats and Democrats.

The idea of direct federally to parochial schools, quote, for strictly non-religious purposes, quote, quote, is more appealing to the public than, quote, allowing tax deductions for parents sending children to parochial and religious schools, quote, quote, which is favored by a much narrower 46 to 44.

In its latter case, Catholics support such a measure by 69 to 26, which also...

One interesting note is that in both propositions, opposition to aid to parochial schools and relief for parents who send their children there is centered in the South, where plurality remains sentence in their opposition.

So you've got, you've got a sexual cross-current here that you have to, next time you're bringing all those white, white schools down there, now you've got a great deal.

If you move on to parochial and you run the

It's a private.

Then you just pick up another thing.

No.

I mean, we carry it here.

It's private.

I think that's what it has to be here.

Well, yes, George, I'd like to comment on the issue of the education issue.

Through, say, about 20 years or so following World War II, we had a rising school population.

We have a need for an extended fiscal plan.

We have a teacher shortage.

And people who are interested in education and the education issue, whether we're going to be able to provide the classrooms and the teachers for the children that are going there, that is the education issue.

In the last three or four years, and especially for men in this past year,

The whole situation has changed.

We have more teachers than we need.

The classroom population is not growing.

The physical plant is pretty well there.

There aren't those needs.

The teachers have not exactly covered themselves, or they've been on strike in many constituencies.

People are beginning to think they're giving a bad example to their children, that they're greedy.

and so on.

And so I would venture to say that the education issue has just turned 180 degrees and that it may very well be that many of the people who mark down concern about education are really concerned that somehow or other it is being done right and the teachers are spoiled and it's too expensive and the courses are going up too fast.

It's a rather different look at it than

That's true, for a long, long, long period.

I don't know if I mean that.

I'm just speculating.

I don't know.

I want you to look at the polls on the vote on the bond issue.

You know why we picked education?

Because the numbers were good, and it related to property tax.

Is crime, or is health,

gave us the same sort of a ride on the property taxes.

We would pick that.

But it doesn't.

Because 50% is in education.

And we can't identify any substantial percentage.

Is there any other expense, John, that you know you didn't consider, I'm sure, the possibility of this when you were originally talking about this?

Frankly, a tax reform that gives us property tax relief, we don't think there's nothing else.

Just send the money down there and say that you get the money to lower your property tax.

That's obviously another approach.

But we thought we picked up a certain amount of forward motion by the education lobby and these other things.

And more or less coincidentally, we had a McElroy Commission going out there, and then this California case came in.

And the states are all impertinent now.

They know what to do.

And they're all me.

And the governors are wondering where the hell they're going to get the money to support these people on a statewide basis.

California case doesn't look good.

Right.

Well, what John's saying is different words.

It's political, it's political.

It's not the intensity of education at all.

It's more of education, but rather a reveal of the most popular type of education.

But we wanted to transfer the Honest of Leavening Attacks of the Governors of the State Legislatures to the Federal Government in 1972.

I take the point that you made, John, earlier

if the president gets the credit for reducing property taxes as an agency recognizing it isn't a half but what the president mentioned is for reducing property taxes so that hand in the process is a produce now you're getting that middle class abridging middle class newcomer

which is a big potential.

And that's only part of the issue.

But focusing on the property tax is a big part of it because the same

kind of a constituency that you're talking about that is interested in age-broking schools, only it's bigger, is very concerned with over-privacy tests.

The other ones are .

They suddenly find that they're going up and up because they can't control the over-privacy tests.

And the person who latches, who they identify as trying to help them on that issue.

That's really the thing.

I was trying to say, what is your gut reaction, you know, to the proposition of the President?

I understand.

It's a long and close question.

I walk both ways.

What comes to mind right now?

Do you think that no matter how we package this, it's going to be, we want to raise taxes?

No.

Do you think we can get away with it?

I don't think we can get away with it.

I think the first thing we have to do, and most important thing we're going to have to do next year is have a file in place.

Now, if you had to raise taxes to do that, then I'd raise taxes.

You have to have a lot of taxes.

It really would be better on a conventional basis.

Now, that's not as imperative as having it on a pro-informative basis, but you really ought to have it on a conventional basis.

I'm not that pessimistic about tax in the election year.

I don't think it's all that bad.

It's going to be interpreted and explained and understood as a failed tax on a national basis.

But if that isn't a bad deal, people kind of like saving taxes.

They like getting taxes.

This is why the analysis of those taxes, they oppose the most.

They oppose those that they see the most.

They're the most directly connected to the property taxes because they come once a year.

I mean, I just think it's an outrage.

So it cuts across all lines.

And when you can simply go over it perfectly candidly, frankly, that's a political thing, just so you can say it.

But do it in such a way that, yes, we're going to oppose it by the end of next year.

It's a bomb system.

But frankly, it's better tax than a tax on your home.

And I'm trying to make it possible for Americans to own and maintain a home and for old people to maintain a home, for young people to buy a home, because this is what contributes to the strength and character of this nation.

And so I just think it's a good political issue.

I think you almost have to.

There's a way to get these schools.

off the backs of these people.

You could call it the property tax relief act.

And in the process, I would just hammer and make it abundantly clear.

I would leave these places.

I'd make it clear that he is for parole.

That's part of the problem.

Sure.

I faced it that way.

What's our option with the state?

That's the problem with the option with me, John.

We can do it.

We're paying per capita.

Those who really are far, they know it, understand it, and yet they minimize some of it.

Well, the problem's about to seem good.

Because it gets kind of lost in the repeats of the properties.

They're all dead.

But if I had to make a choice.

But if I had to make a choice, I'd be the girl who was doing the thing again.

I don't think I am.

Yeah, the whole tax relief act.

In other words, you would take out, you would take out a commercial property and not take out a farm property.

And that gets all the way to the... And let me say on the farm thing, too, that we have our problems with the farmers, and we'll find ways to handle that, too.

But now on the farm thing, people that...

people that own farm property in school districts aren't doing too bad, in my opinion.

They're not doing too damn bad, are they?

No.

But also, you've got to remember, farm property is close to the school, is in the town, is close to the school, and that property is going to have to play bad, too.

I don't...

he would probably make it apply to a farm residence.

A farm homeowner.

He gets the same deal.

That's their home.

For whatever value they put on his home, he gets it just like the city does.

He doesn't get a free 200 acres or 300 acres.

But he, by far, the residential improves on his farm.

Like a five acre.

Or he can give him a home too much.

Give him two acres or whatever.

Do that.

I must say, I know that, for example, the richest school district I had once thought of in our area was San Marino, Beverly Hills.

But I think it's actually, it's one.

Down where they've got three or four rubber plants.

But it's called commerce.

Commerce, yeah, commerce.

One of the richest dams in the world.

That's all factories.

All factories and one little school and hardly any population and they're kind of running out of their ears.

It just doesn't make any sense.

There's no reason to really lend to their taxes.

John, how would you come out of the use of 4% value-added taxes and lift the matching state taxes up?

Why, you'd send around $19 billion.

We still, on an individual level, we come out the same way because we weren't, we, these charts didn't show when business tax relief.

We'll run the new set of charts.

Every state legislature, when they're putting in the new taxes, they're the Nixon tax church.

Every damn legislature, they can't have it.

I thought your arithmetic was that if you left out the commercial property,

That's right.

So that tax remains.

That will more or less limit any need for increase in taxes.

There still needs to be some kind of guarantee that the property tax is lowered and lowered on something more than a 6 months to 12 months basis.

And that's the vulnerable point that I think it could be given.

You offer the local property taxpayers the opportunity

They have a lower tax.

But it requires follow through that we can't guarantee.

We can't amend their Constitution.

No, I know.

And the danger of raising federal taxes.

Well, the danger of raising federal taxes when you can't guarantee the property tax reduction is the vulnerable point that's on their feet.

Because then we get charged with higher federal taxes without having accomplished what is a very good goal.

And what I was saying, I know they're coming down for a six because they don't get any federal money until we do.

Well, that problem only matters when a thing passes, and if it doesn't matter anymore, that doesn't matter.

If it doesn't matter, it's the vulnerability to it on the basis of the nation.

Well, I agree it wouldn't pass.

On the other hand, let's try to think in terms of a moment.

Uh, think in terms of a moment.

On the plus side, in terms of what you sell, first you do sell home tax relief, if you want to call it that, homeowner's tax relief.

Maybe you call it the homeowner's tax relief, that's where you're at.

I couldn't agree more with John.

Because it's a matter of me.

It isn't because of the guy.

I have to believe.

schools and private schools of all kinds, I think that you need guard steps.

I believe I'm for great universities like the University of California, but I think we've got to have places for little schools like Whittier, too.

I think it's good.

And for the same token, I think having these, and I know that mostly the Catholic education is in a hell of a situation at the moment.

I mean, the Catholic universities are...

are poorly stamped, inferior, and so forth.

Virtually everybody who's been in the law school in the country was recommended to the Supreme Court, except one from Florida.

I'm just not in the same part.

It's on its own.

Well, you can make a very selfish argument to the people.

Now that isn't true.

It costs a high cost for private schools in this country.

Commercial schools are four and a half billion dollars a year.

Mr. President, let me get to a lot of dimensions.

The University of Texas right now, that I support, has got more money in the area than it gets, and it's too much.

But the Board of Regents right now is saying they're going to get more money invested than you have in China.

That's right, sir.

They're saying now that you can't be a member of the faculty.

That's just kind of what they've reached.

They've gone too far.

These early professors don't even teach.

So they've got a major program now where they're going to require every professor to be restored to life on the campus and teach so many hours.

And what the private schools do

They operate on it much more efficiently, much more economically, much more realistically.

And you can defend this across the board and nobody will argue.

I don't think they will.

But this is true in California, it's true in Texas, it's true nearly everywhere.

If this goes through that money to those

white white schools down here that will shut off any argument that's uh if i don't have as illegal as long as they don't hit states parents could apply for their first half of the fair whatever comes to the states

Let me tell you, but if I was God, I would say, come here and conquer, so they have a man that has a son, a white wife, so don't worry about that.

But nevertheless, that's it.

And looking at it, coming back, looking at it, we must include this in this copy.

I think it does bite the bullet of the property menu, but it does have the, which I think is a very real concern.

It does seek certainty about Biden.

Now, we must remember, while it goes after the private school, there's another way to go after it, which is more direct, so we mustn't just do it with that reason.

Third point is, hey, there's certainty.

When you talk about ballots, you believe me, I've heard it's two words.

I think after all, we were in an election year from yesterday.

We just didn't have to want all of these things.

Congress wants all of these things.

If I want all of these things, we have to pay them.

Just outside of that quite directly, you know, it would be, well, wait a minute, wait a minute.

You could take your $7 billion or your $6 billion and apply that for a bunch of dollars, although that isn't enough.

It'll pick up the normal balance.

We won't get an absolute balance unless we're looking at that.

The problem is that you can't control expenditures and they are always going to go up.

It's not only an election year, but we are certainly going to balance it on a basis.

So no credit, no question about that.

Okay.

Well, I think we've got enough of a feel of this thing.

John, do you want to take any more of the politics?

Assuming we take the property, assuming we take out the, if you don't get that, the legal problems which you raised.

What do you think politics is?

One thing I'd like to do is, you don't like to talk politics, do you?

No, I don't want to talk politics.

One thing I'd like to do is run out the rest of our space and look like this is rather negative.

appeal in New York and New Jersey.

It has a positive appeal in all those states if we don't require an increase in state taxes in every one of those states.

In other words, that would be a free-law state taxes and it has a positive appeal in all states.

Have you...

I'm not sure about that.

More so in the industrialized states.

Have you the figures on all of the states?

We're in process of getting them.

For example, it is very important, well, in New York State, of course, but if you have a positive field because of the enormous interest in the local schooling, which is basically, and in Pennsylvania, and in two of the strongest cardinals, you've got three enormously strong cardinals.

And for that matter, in California, in New Jersey, in New Jersey, in New Jersey.

California has that kind of a problem.

He doesn't advise certain people.

Even in 1950, Mr. President, California passed a constitutional amendment that allowed state funds for private insurance.

Oh yeah, with a big margin.

So that's a long time ago.

I think we ought to look at that and see.

I noticed Arizona was the first one on top of this, where no thanks for getting out of your ghetto.

No, we didn't have a judge, that's enough.

I was trying to get a picture with one of the big states back there, and he said, no, we're qualified.

One other, one other thing.

That's not what I'm trying to do.

One other thing, it's not exactly a consequence.

You can say the business to me.

If you are operating by the end of time, you deal with some of the problems.

that more than will have to be enforced on this corporate environment.

So let me say, and I'll ask for one thing, because in other words, now we're talking about what's right, and actually we can talk about that too.

But one thing is, the deal with me about the fact that I'm taxed, and I know that John is very controversial in the country,

among the tax experts.

But George will be, as I understand George, your position, and you think, that it ought to be part of the tax system, and that it's a hell of a lot better tax than something we got directly from him.

Yes, I think that he gets pretty good.

a increment of value-added tax and just take out proportionately all the other taxes that you had at the beginning.

We're just deducting the kind of reason that was mentioned.

And, Mr. President, these taxes, I bet you every single tax is not bad on the market.

Every time you give the people taxes, you hold them on themselves.

Any other kind of tax?

I mean, if you put it in that case, and I know Cat, if I had greater respect for his political, Cat very properly says, oh, Christ, don't raise taxes on the election.

Tell him it's all done.

Tom, I'm on the phone with Bill Bright, and I'm calling back.

You're the man.

All right.

Now, bye, guys.

Bye, sir.

We'll be back.

I think a lot of it depends on what you send the money for.

I think in this environment you have to show, in the time of controls, you have to show festival responsibility next year in almost any color.

The only problem I have with any of the conclusions is that

You've got to appeal to the people who feel that way.

I think they're a big group.

I don't think you can appeal to them by raising taxes.

You've got to have it all set on the property.

Well, you put the program up as a Washington program.

Yeah.

And so you are increasing.

You say you're not adding taxes, you're changing them.

But the guarantee, the requirement of the reduction of local property taxes has to be worked over very long, very hard, because we ran into this twice in California, and it just knocks the props out of them.

I'd say yes, I'd say yes, yeah, and put it in there and say, well, it has to be required, period.

That's right.

As long as we can point to something right there, why not?

We will accept amendments to make it more clear.

Well, thank you very much for all your time, sir.

Thank you.

Well, I did without a fee or anything.

I did without a fee.

Well, I'm going to go back to him.

What the hell?

I haven't got any out of the law firm, but if you get some out of the firm, John, that I don't know about, I'll pay somebody.

All they got is a question of the bond, so it would be paid in the firm on bond.

Well, I didn't know that.

You left me.

Thank you.

That was a fine presentation.

All right.

Yes, sir.