Evening star., 1963-01-24

man WHOSE WIFE is COnllIleu 10
an institution.
The revenue cost of these
changes in the child care de-
duction would be $40 million
per year, most of which would
benefit taxpayers with incomes
of less than $1,000.
8. The Tax Treatment OF
Older People. .-.-. l recommend
that all people aged 65 or over.
regardless Of the source Of their
income, be allowed a credit of
$500 against taxes otherwise
owing. This credit would replace
both the extra exemption al
lowed to older people and the
retirement income credit, and
would be of far greater value
to the vast majority Of older
taxpayers. Under present law
the amount Of retirement in
come utilized In computing the
retirement income credit is re-
duced, dollar for dollar, by So
cial security and railroad re-
tirement benefits received. The
proposed $500 credit would also
be reduced but only by q linn
tied amount.
The enactment of this recon-
mendation will insure that sim
gle older people will not be sub
ject to individual income tax
liability unless their incomes
exceed $4,000 0or married cou-
Piles $4,000. 1t will greatly
simplify the filing of tax returns
for our older people. ;. The
revenue reduction viii be
1920 million per year.
4. Income Averaging. Many
taxpayers are heavily penalized
If they receive income in widely
fluctuating amounts from year
to year. / have instructed the
Secretary Of the Treasury to
present to the Congress as part
Of this pro gram an income
averaging provision. This
means fairer tax treatment for
authors, professional artists,
actors and athletes, as well as
farmers, ranchers, fishermen,
attorneys. architects and others.
The estimated annual revenue
cost of this proposal is $50
million.
5. Employees Moving Ex-
penses. Under present law en-
ployes are allowed to exclude
from their taxable income any
reimbursement received from
their employer for moving ex-
penses when changing their
place Of residence and job To-
cation recommend ap-
propriate extension of this tax
benefit to new employees. This
recommendation will entail a
revenue loss of $40 million per
year.
6. Charitable Contributions,
Under present law an extra 10
per cent deduction over and
above the basic 20 per cent
limitation on deductions for
charitable contributions is al
lowable for contributions to
churches, educational institu-
tions. and medical facilities and
research. I recommend that this
limit on the deduction for char
liable contributions be lib
eralized and made more uni
form. To this end the 80 per
cent limit should extend to all
organizations eligible for the
charitable contributions deduc-
ton which are publicly sup
ported and controlled.
!. Research and Development
a a spur to private re-
search and development I
recommend that expenditures
for machinery and equipment
used directly in research or de-
velopment activities be allowed
as a current expense deduction
this measure, which will
involve a revenue cost Of some
$50 million, will provide future
benefits in the form Of better
products, lower costs, and larg-
er markets.
B. Base Broadening and
Equity.
AFlOOr Under Itemized De-
ductiOns of individuals. Most
taxpayers use the standard de-
duction," generally equal to 10
per cent of income up to a
maximum of 81 900 .. the pro-
portion of taxpayers using it
has declined steadily. At pres
ent, more than 40 per cent of all
individual income tax returns
are filed by people who itemize
deductions for a variety of de-
ductible personal expenses, such
as State and local taxes, inter-
est, charitable contributions,
medical expenses and casualty
loses. The amount Of itemized
deductions claimed on tax re-
turns has gone up sharply. q,