777–2

Conversation No. 777-2

Date: September 14, 1972
Time: 2:34 pm - 5:59 pm
Location: Oval Office

The President met with John D. Ehrlichman.

Greetings

Louis P. Harris


*****************************************************************

BEGIN WITHDRAWN ITEM NO. 1
[Personal returnable]
[Duration: 6m 39s ]


END WITHDRAWN ITEM NO. 1

*****************************************************************
 2

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. Oct-06)



Revenue-sharing bill signing ceremony
-Length and location
-Logistics
-Vice President Spiro T. Agnew
-The President's speech
-Proponents of bill
-Nelson A. Rockefeller
-Prominent citizens
-Agnew’s role
-Logistics
-Crowd response
-Gifts for guests
-Pens
-Historian speaker
-Richard B. Morris
-Columbia University
-Speech for television
-Historic perspective of bill
-Agnew
-Rockefeller
-Possible speech
-Historian speech
-The President’s view
-Media reaction
-Rockefeller
-Role
-Effect on Congress
-Remarks
-Joe Peckman and Walter E. Heller
-Efforts for George S. McGovern
-Lyndon B. Johnson
-The President’s view
-List of invitees
-McGovern
-Bipartisanship
-Rockefeller
-Wilbur D. Mills
-Support for bill
-Rockefeller
 3

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. Oct-06)

-Signing ceremony
-History of bill
-Opening speech
-The President’s view
-Support for bill
-List of guests
-Aid to Administration
-Political benefits
-Heller
-Peckman
-Previous photographs of participants
-Requests for photograph
-Murray L. Weidenbaum
-Administration's work on revenue-sharing
-Planning for ceremony
-Passage through Congress
-Rockefeller
-As proponent of bill

Tax policy
-John B. Connally
-Ehrlichman’s previous conversation with Connally
-Ideas on tax policy
-Increase in minimum tax
-Connally’s view
-Ronald L. Ziegler
-Interest in tax policy

Stephen B. Bull entered at an unknown time after 3:49 pm.

The President's schedule

Bull left at an unknown time before 4:07 pm.

Tax policy
-Connally
-Dividend
-Increase in minimum tax
-The President’s view
-Need for action
-Ehrlichman’s letter to Washington Post
 4

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. Oct-06)

-Response to Carl T. Rowan column
-Administration's stance on taxes
-Wall Street Journal article

Bull entered and left at an unknown time before 4:07 pm.

-H.R. (“Bob”) Haldeman

Frank L. Rizzo
-Revenue sharing
-McGovern

George P. Shultz, Arthur F. Burns, Connally, Herbert Stein and Ziegler entered at 4:07 pm.

Greetings


*****************************************************************

BEGIN WITHDRAWN ITEM NO. 2
[Personal returnable]
[Duration: 55s ]


END WITHDRAWN ITEM NO. 2

*****************************************************************


Tax reform discussion

Manolo Sanchez entered at an unknown time after 4:07 pm.

Refreshments

Sanchez left at an unknown time before 5:59 pm.

Tax reform
-Proposals for tax reform
-Merits of choices
-Need for decision
 5

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. Oct-06)

-Property tax
-Senior citizens
-Middle-income sector
-Progressiveness of taxes
-Income tax framework
-Rise in federal revenue
-Compared to actual income
-Minimum tax
-1969 proposal by the President
-Combination of programs
-Fiscal merits
-Achievement of the President's objectives
-Paper
-Middle-income group target
-Property tax program
-Table
-Credit on income tax
-Income limits
-Deduction
-Possibility of variation of targeted groups
-Senior citizen tax benefits
-1973 estimates of costs
-Credits for income tax
-Five-year program for reform
-Beneficiaries
-Older people
-Middle-income tax benefits
-Tax credits
-Senior citizen program
-Present property tax average
-Credits toward income tax
-Deduction for interest on mortgages
-Charitable contributions
-Revision of standard deduction

Property tax
-Income tax deduction
-Effect on wealthy schools neighborhoods
-Maximum tax
-Phase-out
-Texas
 6

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. Oct-06)

-Effect on localities
-Property tax increases
-Effect on Federal Reserve System
-Need for safeguards
-Grant approach
-Grants payable on property tax payment
-Inclusion of renters in property tax program
-Administrative problems
-Standard deduction for renters
-Gasoline tax
-Land lords’ possible role
-Tenants
-Internal Revenue Service [IRS]
-Renters' problems with property taxes
-Reform program
-Time frame
-Need for goals
-Senior citizens
-Phasing of taxes according to age

The President's 1969 tax reform proposals
-Minimum tax
-Individuals
-Corporations
-Revenue
-Political benefits
-Complications of proposal
-Municipal bonds' interest
-Congress's past reaction
-Minimum tax proposal
-Frederick W. Hickman
-Edward S. Cohen
-Taxpayers' reaction
-Possible revision of present system
-Retention of basic tax framework
-Revenue
-Parallels with old age property tax
-Effect on budget
-Federal revenue
-Growth over years
-Labor force growth
 7

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. Oct-06)

-Inflationary effect
-Proportional growth
-Tax bracket progressivity
-Rise in real per capita income
-Productivity rise
-Milton Friedman
-Congress's revision of taxes
-Shifting of tax bracket
-End of progressivity effect
-Friedman theory
-Presidential proposal of tax revision
-Minimum tax
-Progressivity effect
-Inflation progressivity
-Real income progressivity
-Use of funds
-Offsetting property tax program
-Projection of federal budget
-White House five year budget projection
-Brookings Institute study
-Federal revenue spent
-Need for increased revenues
-Tax increases
-Congress's tax policy
-Traditional revision of tax brackets
-Property tax
-Elimination of inflationary effects
-Total revenue gains
-Increase in federal revenue
-Progressivity effect
-Real income growth
-\"Progressivity dividend\"
-Deductions
-Increase in real income
-Description of revenues
-Combination with property tax program
-Spending budget
-Part of program
-Potential problems
-Maintenance of present tax rate
-Property tax changes
 8

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. Oct-06)

-Aid to senior citizens
-Aid to middle-income group
-Minimum tax
-Tax equity factor
-Tax simplification program
-Credit approach
-Use in grant program
-Effect on property tax for education
-Advantages of grants
-Grant program
-Effect on property tax
-Shift of burden of tax
-Attachment of conditions
-Effect on property tax
-Potential problems
-Property tax variations
-Conflict with state and county programs
-Solution of problems
-Inflation progressivity effect
-Lowering personal income taxes
-Friedman
-Capital gains tax
-Differentiation between real and inflationary
gains
-McGovern’s proposal for taxes
-Shultz’s press conference
-Tables
-Progressivity effect on capital gains
-Application to income and capital gains
-Capital gains tax reform
-Effect during election
-Tax form simplification
-Short form
-Package return for older taxpayers
-Political effects
-Tax reform compared with tax increase
-Complications of introducing new programs
-Deductions
-Loopholes
-Congressional input
-Public reaction
 9

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. Oct-06)

-Acceptance of reforms
-Fear of increase
-Connally
-Wealthy people
-Tax system
-Rewards for hard work
-Loopholes and tax shelters
-Use by taxpayers
-Tax lawyers
-Loophole use
-Farmers
-Cattle-growers
-Housing developers
-Oil drillers
-Corporations
-Impact of closing loopholes
-Ranchers' concern
-Capital gains
-Political effect of reforms
-Effect on November 1972 elections
-Political contributors
-Misinterpretation of reforms
-Need for tax equity
-Equating of reforms with tax increase
-Possible solutions
-Reaction of public
-Structural change compared to tax level change
-Income tax revision
-Value-added tax [VAT]
-Property tax problem
-Shultz's efforts
-Need for solution
-Need for progress
-Fulfillment of promises on taxes
-Property tax reform
-Old age tax reform
-Need for increase in revenues
-Raising of taxes
-Avoidance of issue
-Old age income tax for 1974
-Progressivity effect
 10

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. Oct-06)

-Balancing of future budgets
-Congress's traditional adjustment of taxes
-Capture of progressivity dividends
-Expenditure program
-Future economic trends
-Property tax relief
-Costs
-Funding of program
-Expenditure cuts
-Tax reforms
-Public reaction
-Five-year tax plan
-Projection of revenues
-History of planning
-John Enoch Powell
-Conservative Party rally address of October 1968
-Decreases in taxes
-Results
-Burns’s view
-Burns’s Senate testimony
-William Proxmire
-Difficulties
-Need for defense outlays
-Percentage of revenue
-Vietnam
-Arms control

Budget-cutting proposals
-Administration's progress
-Reasons for administration's results
-1968 victory margin
-Democratic Congress
-The President’s view
-Community action programs
-Office of Economic Opportunity [OEO]
-Job Corps
-Education departments
-Department of Housing and Urban Development [HUD]
-Food stamps program
-Big-spending programs
-Administration's stance
-Welfare
-Education
 11

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. Oct-06)

-Community action
-Incoming Congress
-Outcome of 1972 presidential race
-Relations with administration described
-Need for budget revision
-Connally
-Agriculture Department
-Cotton program
-Department of Health, Education and Welfare [HEW]
-HEW budget
-Subsidies for higher education
-OEO
-Community action program
-Urban renewal
-Transportation programs
-Budgetary revision for future
-Stein
-Possibility of deficits
-Need for fiscal responsibility in budget
-Constraints
-Future opportunities for administration
-Conservative philosophy
-Government growth
-Commitments to cut budget
-Administration's goals
-Spending cuts
-Group over 65 years old
-Administration's aid
-Tax reform
-Avoidance of tax increase
-Progressivity effect
-Need for spending restraints
-Balance-the-budget proponents
-Mills meeting
-Support of the President's budget ceiling
-Welfare program
-Chances for reform in House of Representatives
-Incoming Congress's view on welfare
-Pledge of support for the President


*****************************************************************
 12

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. Oct-06)

BEGIN WITHDRAWN ITEM NO. 3
[Personal returnable]
[Duration: 2m 8s ]


END WITHDRAWN ITEM NO. 3

*****************************************************************


Administration policy
-Rockefeller
-Domestic policy ideas
-Program costs
-Restructuring cost
-Direction after election
-Continuation of first term trends
-Foreign policy achievements
-Domestic policy achievements
-The President’s view
-Democratic Congress influence
-Revenue sharing program
-New policies
-Re-examination of older programs
-The President’s view
-Hunger issue in America
-Columbia Broadcasting System [CBS]
-Influence on Congress
-Politicians
-Journalists
-White House Conference on Food, Nutrition, and Health
-Dr. Jean Meyor
-Food Stamp program
-Funding
-Use of stamps
-The President’s view
-Changes in policy
-Liberal stance
-McGovern's proposed budget
-Programs
-Compared to the President's budget
-Effect of election on future policy
-Connally’s views
 13

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. Oct-06)

-Appeal to public
-Health program
-McGovern's proposal
-White House program

Tax reform programs
-Options
-The President’s instructions
-Equity
-Old-age tax reform
-Progressivity effect
-Stein
-Connally’s view
-Ways and Means Committee
-American taxpayer
-Public opinion
-Property tax
-Administration's pledge
-Old age tax relief
-Cutting of expenditures
-Personal income tax
-Progressivity effect in taxes
-Shultz’s view
-Influence on tax reform
-Charlie Lawles
-the President’s view
-Duke University
-Tax philosophy
-Income tax to achieve social changes
-Grant approach
-Goals of tax reform program
-Government's share of Gross National Product [GNP]
-Societal shifts
-Tax system attributes
-Incentives
-Effect of changes on society
-Working papers
-Treasury Department
-Deadlines for reform proposals
-Presidential election
-Property tax
-Old-age tax relief
-Tax form simplification
 14

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. Oct-06)

-Timing
-Deductions
-Effect on public
-Short form completion
-Old-age tax forms
-Accountants
-Avoidance of tax
-Long-range goals
-Fiscal dividend
-Stein’s view
-Public perception
-Business Week
-Journal of Certified Public Accountants
-American Economists' Association
-Public perception
-Proper time for public proposal
-Increase in revenues
-Increased returns for taxpayers
-Budget deficit
-Progressivity effect
-Tax reform program
-Congress
-Compared to tax increase
-Aid to senior citizens
-Phase-out of benefits
-Income levels
-The President's constituency
-Machinists
-Automobile workers
-Homeowners compared to renters
-Benefits
-Comparisons
-Administrative problems
-Use of standard deductions
-Deduction for renters
-Renters program
-Presentation to Congress
-Phase-out of benefits
-Income levels
-Old-age benefits
-Standard amount
-Credit for taxpayer
-First-year goals
 15

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. Oct-06)

-Proposals for reform
-Timing
-Possible modifications
-Old-age tax relief
-Pro-rated with age
-Early retirement
-Social Security system
-Navy retirement age
-Tax credit
-Senior citizens’ opinion
-Arthur S. Flemming
-Number of people affected
-Overall program
-Need for consistency in proposals
-Congress's effect
-Credit for the White House
-Old-age tax relief
-Flexibility of age requirement
-Credit approach compared with grant approach
-Shultz’s view
-The President’s view
-Political effect
-Advisory Commitee on Intergovernmental
Relations [ACIR] report
-Congress's approach
-ACIR report
-Study of taxation's effect
-Need for solution
-William D. McElroy
-ACIR report
-Relief from property tax for seniors
-Appeal to young people
-Republican National Convention
-VAT program
-Administration's policy
-Efforts
-ACIR
-VAT
-Public stance
-Efforts by administration
-Administration's public stance on tax increase
-New tax proposals
-VAT
 16

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. Oct-06)

-Chairman of ACIR [William R. MacDougall]
-Progress report on taxes
-Tax plan
-John Kenneth Galbraith
-New tax program by the President
-The President's stand on tax increase
-Described
-ACIR
-Past policies
-Equity
-Tax preferences
-Tax revisions
-Reduction of rates
-Alternative proposals
-Minimum tax
-Timetable for presentation
-1972 election
-The President’s previous press conference
-Congressional proposals
-Tax reform discussions
-Administration's counter proposals
-Mills
-Administration proposals
-Ways and Means Committee
-House tax proposals
-Timing of White House announcements
-Capital gains tax
-Inflation premium clause
-Effect on taxpayers
-Campaign contributors
-Congress's view
-McGovern's campaign proposals
-Capital gains tax
-Homeowners
-Advantages of capital gains
-Political effect
-Senior citizens
-McGovern rebuttal
-VAT
-Connally’s view
-The President's policy
-Public's expectation
-Property tax reform
 17

NIXON PRESIDENTIAL MATERIALS STAFF

Tape Subject Log
(rev. Oct-06)

-Opposition to tax increase
-ACIR position
-Sales tax
-Effect on local revenue
-Media coverage
-New York Times

Revenue sharing bill
-Shultz’s recent conversation with Ehrlichman
-Retroactivity
-Administrative procedures
-Federal government-recipient ratio
-Treasury Department opinion
-Shultz’s view
-Timetable for fund allotment
-Governors
-Mayors
-Option for releasing funds
-The President’s view

Parting remarks
-Paper

The President's schedule
-Saturday appointment
-Trip to Texas

Connally's schedule

Ehrlichman, et al., left at 5:59 pm.