POLITICS: Front and Center for George McGovern

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TAXES. McGovern claims that 40% of U.S. corporations paid no corporate income taxes last year. (Internal Revenue Service figures for the fiscal year ending in June 1970, the latest available, showed that 1,670,000 corporations filed tax returns and 620,000 —37%—had no taxable income and hence paid no tax.) McGovern would raise the corporation tax rate from 48% back to 52%, its level before the tax reform of 1964. He would end investment tax credits, tighten depreciation rules, and gradually eliminate the oil-depletion allowance, now at 22%. These and other changes, he estimates, would add some $17 billion annually to the federal treasury. By reducing corporate profits, they would also reduce dividends to stockholders.

McGovern's aim is to give the Government a far greater voice in the uses to which investment is put; more of the profits of private industry would tend to be taxed away and invested instead as Government chooses. Such resource allocations would mean a different kind of America, more like the mixed economies and relatively paternalistic societies of Western Europe. This is a breathtaking proposition, to say the least, and it is going to require a lot of explaining before the campaign is over.

INCOME. Anyone making over $50,000 a year—earned or unearned —would have to pay 75% of the excess in taxes, no matter what tax shelters might exist. Inheritance taxes would be increased, with a 77% rate on anything over $500,000. He had originally proposed a confiscatory 100% tax on inheritances over $500,-000, but backed down when blue-collar workers in Wisconsin and Massachusetts objected that taxing anybody 100% was unAmerican. Said a bemused McGovern: "I don't know whether people still think they will win a lottery or what." He would abolish welfare payments and substitute minimum income grants with a maximum of about $1,000 per person annually. All told, his redistribute-the-wealth plan would shift $43 billion a year from the more affluent to the relatively poor. In a study for the Joint Economic Committee, Economist Lester Thurow of M.I.T. found that the gap between the mean annual income of the richest 5% of U.S. families and that of the poorest 5% was $27,605 in 1969; it was only $17,057 in 1947 (using 1969 dollars).

JOBS. A major goal is to provide employment for every able-bodied American who wants it. Says McGovern: "The President could relieve a lot of the tension between blacks and whites if he stopped talking about welfare chiselers and said: 'Look, everybody who wants to work is going to have a job. We don't know quite yet what you'll be doing, but you're going to have a good job. And the Government is going to guarantee employment at decent wages.' "