Masonry Magazine April 1985 Page. 33
• First-forget about a spending freeze; it's not likely.
• Second-there'll be a big deficit cut-over $40 billion.
• Third-defense spending will contribute a greater share than Reagan demands. Outlays will rise by 4%... not 10%.
• Fourth-many programs will miss the axe-Export-Import lending... the Small Business Admin... and Legal Services.
• Fifth-there will be no major tax increases this year.
TAX REFORM ISN'T A GOOD BET to pass during 1985, say leaders of both parties. It's a very complex problem with too many forces working against it. For one thing, tax revision is a second priority after budget-cutting. And, as noted, trimming the deficit-itself a huge task-will take months. For another, those who would be damaged are mobilizing to fight the changes. The array of high-powered lobbyists in the opposition is highly impressive. (Their ability to shape a program's form should never be under-estimated.)
ADDING UP THE RANKS OF OPPONENTS, almost every change is in danger of being blocked altogether... or at least of being rewritten drastically. States and cities with income taxes say that they would have to raise rates if present deduction from Federal liability is eliminated, as is proposed. Real estate people are up in arms over the changes that would affect them. And the nation's charities fear their giver-resources will likely evaporate just when budget cuts make private assistance to the needy more important.
Business's viewpoint will also be pressed vigorously-you can be sure of that. It's not hard to show that repealing the 1981 provisions for depreciation will have a negative effect on investment and on the country's future growth.
Note that President Reagan has shown strong reservations about tampering with the business regulations... and that alone would be a large obstacle to changes in this area.
SO WHERE DOES THIS LEAVE tax reform, whose time has supposedly come? Not dead, by any means. Too many taxpayers like the prospect and want it. But it will take some time to build up a base of support for final passage. And it will require an all-out commitment from one or both of the parties (Some Democrats say it is the issue of the Eighties and want to grab it.) What finally does become law will differ from any of the pending proposals in significant ways. Certainly, it won't be as sweeping as backers demand. It won't step on so many toes... won't offend so many strong interest groups. It will represent real progress but more of a revision than basic reform.
SOME OIL ANALYSTS are projecting even further slides in fuel prices. They believe that the oil glut is heavy and likely to persist indefinitely. With the noncartel nations eager to sell their oil, OPEC has lost control. A few of the experts can see crude breaking below $20 a barrel during 1985.
SOME FORECASTERS STILL WORRY about a revival of inflation-not by as much as they once did, to be sure, and not right away. The clouds they see are small, but real. The concern is based on the possibility that-at some point down the road-two forces heavily responsible for the current welcome price performance may reverse direction. If the dollar starts to decline, the cost of imports may go up and American producers will be able to lift their prices as well; similarly, the oil glut could give way to balance if the OPEC cartel ever succeeds in getting its act together. Finally, there is a fear that the Federal Reserve may generate too much money.
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Bob Barkshire-BARKSHIRE PANEL SYSTEMS, INC.
Federal Way, Washington
Dan Berich-DAN BERICH, INC.
Englewood, Colorado
Sue Conley-CONLEY BUILT, INC.
Denver, Colorado
Dick Felice-FORREST & ASSOCIATES
Des Moines, lowa
Joyce Lee-M. G. LEE, INC.
Hamilton, Texas
Lindy Sosebee-Lindy Sosebee Masonry, Inc.
Little Rock, Arkansas
John Long-JOHN R. LONG COMPANY
Wheat Ridge, Colorado
G. Collin Smith-SMITH-WOLF CONSTRUCTION
Northglenn, Colorado
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MASONRY-MARCH/APRIL, 1985 33