Tape 180 - Monetary Testimony, Australia, Corporation Taxes

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William	Hello this is William Clark	0:04
	of the Chicago Tribune saying welcome once again	0:05
	on behalf of Instructional Dynamics, Inc. to another visit	0:07
	with the distinguished economist Professor Milton Friedman	0:12
	of the University of Chicago.	0:14
	We are recording this visit	0:17
	as we're moving on toward the middle of November in 1975.	0:19
	And Milton the last time we made a tape you referred	0:24
	to your then forth coming testimony in Washington	0:27
	on Mr. Arthur Burns's report	0:31
	to the Senate Banking Committee,	0:33
	that you have since given that testimony and I wondered	0:35
	if there are any surprises.	0:38
	Either in that or in what Mr. Burns had to say.	0:39
Milton	Well so far with what Mr. Burns had to say	0:42
	there were no surprises.	0:44
	He essentially,	0:46
	repeated the position he had taken three months earlier.	0:49
	In saying that the objective	0:53
	of the Federal Reserve was a growth	0:55
	in M1 at the same rate as he had specified	0:59
	before five to seven and a half percent.	1:02
	The only change he made was that with respect to his target	1:05
	for M2 which formerly had been eight and a half	1:08
	to 10 and a half percent he widened that range	1:11
	to make it seven and a half to 10 and a half percent.	1:15
	Widened it at the lower end.	1:17
	So there were no surprises from that point,	1:19
	but there was, there are a number of things	1:23
	that I think are of interest.	1:25
	Number one, as I mentioned last time,	1:26
	the burden of my own testimony was to stress the difference	1:31
	between the objectives which the Fed had set	1:34
	and its actual performance.	1:37
	That the actual performance had deviated very far	1:39
	from its objectives and in particular I stressed	1:41
	that over the past four months there had been	1:43
	an extremely restrictive monetary policy that had	1:45
	brought the level of money	1:51
	to below the upper limit, the lower limit	1:54
	which the fed had set for itself.	1:57
	Now in the couple of weeks since our last tape.	1:59
	There has been no sign of an easing	2:03
	of that extremely restrictive policy.	2:05
	On the contrary, the money supply has dropped	2:07
	in those two weeks so that the situation today	2:10
	is that M1 the narrow money supply	2:13
	is at the same level as it was in the last week of June.	2:16
	Or over four months of essentially zero growth in M1.	2:19
	You have for M2 a four percent rate	2:22
	of growth over that period.	2:25
	Which again is extremely low.	2:27
	And I am more disturbed now than I was then	2:29
	about the possibility that the Fed may be	2:32
	on the verge of ending this expansion	2:35
	and converting it into another recession.	2:38
	That really if we look back for a moment	2:41
	and compare this you will recall	2:44
	that we went through exactly such an episode in 1974.	2:46
	Now at that time what happened?	2:51
	The Fed shifted from about a six percent rate	2:54
	of growth of M1 up to June 1974	2:56
	to a less than one percent rate of growth	3:01
	from June 74 to January 75.	3:03
	In other words it decelerated monetary growth	3:06
	by five percentage points for M1	3:09
	over a seven months period.	3:11
	Then from January to July, June of this year,	3:13
	it went in extremely rapid rate.	3:18
	M1 grew at the rate of 10 percent a year	3:20
	for that five months period.	3:22
	From June to October it's essentially had a zero	3:25
	or a one, less than one percent growth.	3:28
	So we now have a case in which	3:30
	it has decelerated monetary growth	3:32
	by nine percentage points or almost twice	3:34
	as much as in the earlier episode.	3:36
	But for two thirds the length of time,	3:38
	four months or little less than two thirds,	3:40
	four instead of seven.	3:42
	What I am saying is that this deceleration is assuming this	3:44
	at least order of magnitude as the earlier one.	3:48
	The earlier deceleration produced a sharp decline	3:51
	in business it turned the mild recession	3:54
	into a severe recession.	3:57
	Now one more element of foreboding on my part about this.	3:59
	Typically, historically the time lapse	4:04
	between the change in monetary growth	4:06
	and the change in the economy has been	4:09
	of the order of six to nine months.	4:11
	But on the last two episodes,	4:13
	it's only been three to four months.	4:15
	If we take the one I was just describing	4:17
	from June of 1974 the steepening	4:20
	of the recession comes about October.	4:23
	So that you have June, July, August, September, October	4:26
	of four months lead, the upturn comes in January	4:29
	and the trough in the economy comes in April.	4:33
	That's when that follows so that's February,	4:36
	March, April that's a three months lead.	4:38
	Now I have stressed several times	4:40
	that as the markets have become wiser	4:41
	about the influence of money,	4:43
	there has been a tendency for these lags to decline.	4:44
	Now if indeed these lags have become shorter,	4:47
	then the sharp retardation	4:51
	in monetary growth beginning in June	4:53
	if we count four months from that we're into October.	4:55
	And it may be that some of the mild signs	4:59
	that we have seen in October are a reflection of that.	5:02
	For example, the unemployment rate	5:06
	went up a trifle in October.	5:08
	Now that can be explained away as a statistical artifact	5:10
	of the poor seasonal adjustment.	5:13
	Employment in non-agriculture rose,	5:16
	the unemployment rises entirely in agriculture.	5:19
	So I am not going to say that	5:21
	that is by itself strong evidence,	5:23
	but it's a straw in the wind.	5:25
	Again the leading indicators which had been going up sharply	5:26
	in each of the proceeding months fell in October	5:29
	for the first time in four or five months.	5:32
	So that there are some straws in the wind	5:35
	which are not inconsistent with the reading that	5:38
	that sharp retardation in monetary growth beginning in June	5:42
	is already beginning to have the effect	5:45
	of aborting the recovery.	5:48
	Now I, as I say, I don't want,	5:49
	I don't think that one can draw a strong conclusion.	5:51
	Monetary forces are not the only thing	5:53
	that effect the economy, on the whole they account	5:55
	for about 50 percent of the variation in economic activity.	5:57
	But the rest are nonmonetary forces,	6:01
	and at the moment I interpret the nonmonetary forces	6:03
	as working in the direction of continued recovery.	6:06
	In the name of sheer momentum of recovery,	6:09
	historically you have very seldom had an occasion	6:12
	when you started on a recovery went	6:14
	for four or five months and then stopped it.	6:16
	And so I think that momentum is working	6:19
	on the side of smoothing over this sharp retardation,	6:21
	but I only stress that the more I examined the evidence	6:25
	in preparation for testifying	6:29
	in Washington the more disturbed I got	6:31
	about the potentials for the future.	6:32
	Particularly in view of the extraordinarily,	6:35
	wrong headed way in which the financial journalists	6:41
	interpret the situation.	6:45
	In, one day, in the Wall Street Journal of the last week,	6:47
	it was referring to the new monetary report	6:53
	that had just come out and this is what it said.	6:56
	It said, "The quantity of money declined last week,	6:58
	thereby giving the fed more leeway for easing the policy."	7:01
	Well now it just happened that I was going	7:05
	to see a friend of mine at that time who	7:07
	in the past week had had a very bad fall and a woman,	7:08
	and her nose had a bandage on and her face had a bandage on.	7:13
	It wasn't serious but it was not,	7:16
	and I came in and said to her,	7:18
	"Just think how well off you are.	7:20
	How much more leeway you have for good health."	7:22
	(laughing)	7:23
	But that's identical with that reaction.	7:24
	Moreover you see another Wall Street Journal,	7:26
	day after day is saying increasing signs of Fed ease.	7:30
	And this is the old fallacy of interpreting ease	7:34
	in terms of interest rates instead of	7:37
	in terms of the quantity of money.	7:38
	In terms of the quantity of money,	7:41
	the Fed has been showing, has simply been engaging	7:41
	in an exceedingly restrictive policy	7:44
	and that policy has been	7:46
	becoming more and more restrictive.	7:47
	There is no sign in the monetary figures per se of any ease.	7:49
	Now I am persuaded that the Fed does want to ease	7:53
	in the proper sense of causing the quantity	7:56
	of money to grow.	7:58
	But as I mentioned last time, by their present techniques	7:59
	it's very uncertain what they can do.	8:01
	They're not doing this on purpose,	8:04
	but I am more concerned than I was before	8:06
	that they are likely to blunder into a situation	8:10
	in which they do seriously retard economic activity.	8:13
	Slow down the expansion if they don't,	8:17
	even they don't throw us into another recession.	8:20
	I still believe that the more serious danger,	8:22
	indeed the danger which that raises	8:26
	is much more of the subsequent reversal which will	8:28
	lead to an explosion.	8:31
-	Mm-hmm.
Milton	We are continuing on this path of going widely	8:33
	from one extreme to the other.	8:36
	Well that's one set of comments	8:38
	that is suggested by this testimony reaction.	8:40
	The second was that one of the amusing elements	8:42
	of the testimony was that Paul Samuelson and I	8:46
	were testifying and I said in the course	8:49
	of the testimony that I was delighted	8:51
	to welcome him into the ranks of the monetarists.	8:53
	(laughing)	8:56
	Which he objected to of course.	8:57
	But the fact is that we were in complete agreement so far	8:58
	as the immediate situation in the Fed is concerned.	9:01
	Third point, is a very different one.	9:04
	And this is a point I've mentioned before,	9:07
	but I hadn't quite realized its implications.	9:10
	And this is a technical item,	9:14
	but it's a technical item which has had the effect	9:17
	of essentially undercutting,	9:20
	the intention of the Congressional resolution.	9:24
	And it's this,	9:27
	you may recall that I criticized severely	9:30
	the Federal Reserve at the earlier testimony by Mr. Burns.	9:34
	For shifting the base to which they were applying	9:41
	the percentages five to seven and a half percent	9:43
	without saying anything about it.	9:45
	And that in effect what they had done,	9:46
	had been to validate their past departures	9:48
	from their objective.	9:51
	Well I guess in my public protest to that	9:53
	on the pages of the Wall Street Journal,	9:56
	had at least the one effect	9:57
	that Mr. Burns this time included a sentence	9:58
	stating explicitly that they had changed the base.	10:00
	And that the effect was to raise slightly	10:04
	the targets for monetary growth.	10:07
	But if you stop at what they did is the following,	10:10
	they are asked by the Congressional resolution	10:14
	to state their objectives for a year ahead, they do so.	10:16
	But each quarter when they come to testify,	10:20
	they apply those objectives to a new base which	10:22
	is the average of the prior quarter.	10:25
	So this time they apply it to the average	10:28
	of the third quarter, last time they applied it	10:30
	to the average of the second quarter.	10:32
	Now what does that mean?	10:34
	That means they're really only stating their objectives	10:35
	for one quarter ahead not for a year ahead.	10:37
	Because coming a quarter, in the fourth quarter,	10:39
	they'll shift the base again.	10:41
	So they aren't telling you anything	10:43
	except what they're going to do for one quarter.	10:44
	And the second place they are in effect,	10:46
	converting the money supply	10:48
	into what statisticians call a random walk with drift.	10:51
	Consider what happens, they say they're going to have,	10:55
	aim for let's say let's take it on the nose.	10:58
	A six percent rate of growth.	11:02
	They actually over one quarter achieve	11:04
	a one percent higher than that,	11:05
	alright now they shift their base to that.	11:08
	Let's say every time they say they're going	11:10
	to go for a six percent rate of growth.	11:12
	What will you actually observe?	11:14
	You will observe a series of money supplies	11:16
	which an upward drift, but which also deviates	11:20
	from that six percent by the sum of all the errors.	11:23
	'Cause every time they make an error,	11:28
	there's no correction to it you just take	11:29
	that error as a way to go.	11:31
William	I see.	11:32
Milton	See a random walk as you know	11:32
	that term has come into great use	11:34
	especially in describing the stock market as a random walk.	11:36
	And what a random walk means is that,	11:38
	you have a change each period which is independent	11:43
	of a change in a later period.	11:47
	If the stock market goes up today,	11:50
	that gives you no information	11:52
	about whether the stock market is gonna up the next day.	11:53
	The strictest case of a random walk would be let's say	11:56
	that you draw numbers from a hat	11:58
	from a random series and you accumulate them	12:03
	you add 'em up.	12:05
	Now you will have a series that has no trend to it,	12:06
	it'll go anywhere and the stock market behaves	12:09
	like a random walk in the sense that each days change	12:11
	is independent of the prior or the succeeding days change.	12:13
	I'm exaggerating a little it's predominately	12:17
	like a random walk there's a very tiny systematic element.	12:20
	Well now essentially by treating the money supply this way	12:23
	then the quarterly figures in the money supply	12:28
	are gonna be a random walk.	12:30
	Any error is simply incorporated	12:32
	into them and never corrected.	12:34
	Well now as I say, I hadn't quite realized	12:36
	to the full the extent of that, although I had incorporated	12:39
	in my testimony a recommendation for stating the objectives	12:41
	in a way which would eliminate this.	12:45
	That as I had incorporated them instead	12:47
	of stating the objectives in terms	12:49
	of a percentage rate of change,	12:50
	the Fed should be required to state its objectives	12:52
	in terms of the level of the money supply,	12:55
	over a succeeding period.	12:56
	And a range of plus and minus one percent	12:59
	or two percent around that level.	13:01
	You see the doing what they're now doing seems	13:04
	to make some sense given the way	13:06
	they're now stating their objectives.	13:08
	Because if they say five to seven and half percent,	13:10
	those limits widen the farther out you go indefinitely.	13:13
	And so you're setting very, very wide limits	13:17
	for a year from now and consequently there's a temptation	13:19
	to say well we ought to update this every quarter,	13:23
	and you do this simple thing.	13:26
	I don't believe this was done	13:27
	with malice of forethought at all.	13:28
	But I think it's an inadvertent technical point	13:30
	that in fact undermines the whole intent	13:34
	of the, of the joint resolution.	13:37
William	That's interesting.	13:42
	Milton this a very abrupt change in subject matter,	13:43
	but we were talking before we started recording	13:45
	about the almost comic opera series	13:47
	of events in Australian politics.	13:50
	Under which they have a temporary Premier now	13:52
	with elections coming up, comic opera except	13:56
	it's pretty serious for the people there.	14:00
	You were recently in Australia.	14:02
	I'm sure that your subscribers would be interested	14:04
	in hearing those comments.	14:05
Milton	Well I would not have been aware	14:07
	of what was going on really if I hadn't been in Australia.	14:08
	(laughing)	14:10
	But it is absolutely fascinating	14:11
	Australia is a parliamentary system like Britain.	14:13
	In which you have a Prime Minister,	14:17
	who is elected by the Parliament	14:19
	and can be dismissed by a vote of no confidence	14:21
	by the Parliament.	14:23
	And in addition it has, Australia has a Governor General	14:24
	who plays the role that the Queen plays,	14:28
	a formal head of government.	14:30
	Well now the situation in Australia	14:31
	was that it has two houses, as Britain does.	14:33
	Britain has the Commons and Lord,	14:35
	and Australia has a House of Representatives	14:37
	and the Senate.	14:39
	The Labor Party, not quite three years ago	14:41
	came into power after having been out in the cold	14:44
	for some twenty odd years in the sense	14:46
	that they got a majority in the lower house.	14:49
	The main house, the House of Representatives.	14:51
	But the Senate the upper house,	14:53
	retained a one vote majority	14:55
	for the opposition liberal country parties.	14:57
	Now having come into office,	15:00
	after having been so long out in the cold.	15:02
	The labor government tried to achieve all	15:06
	of its reforms immediately and in the result produced	15:07
	an absolutely incredible economic performance.	15:11
	So that as a result after two years	15:14
	of the Labor party being in power,	15:15
	Australia had the highest rate of inflation.	15:20
	Something coming up to 20 percent of its postwar period.	15:22
	Combined with the highest rate of unemployment	15:26
	of the postwar period at rates unprecedented.	15:28
	Four percent or something for Australia	15:30
	where they had been running around one percent.	15:32
	This was partly a result of a very rapid rise	15:34
	in real wages instituted by the government.	15:36
	And of rapidly increasing government spending,	15:39
	40 percent per year the rate	15:42
	of government went up and so on.	15:44
	Now had it done this over a long period	15:46
	it might have gotten away with it,	15:47
	but as it was there was a great opposition to it.	15:49
	And obviously it lost popularity a great deal.	15:51
	So as of two months ago there was uniform agreement	15:54
	that if elections were held then,	15:58
	the Labor party would be overwhelmingly thrown out.	16:00
	How to get elections?	16:03
	Well they, one power, one of the few powers	16:05
	which the senate has is to deny appropriation bills.	16:08
	To veto appropriation bills,	16:13
	passed by the lower house and it did so.	16:15
	This was unprecedented in Australian history,	16:16
	but with the idea of forcing a new election	16:19
	because if there were no appropriation bills weren't passed	16:21
	could the government govern.	16:24
	Well Mr. Whitlam who the Labor Prime Minister	16:27
	and who is an enormously effective campaigner.	16:30
	Mr. Whitlam proceeded to say he was going	16:33
	to govern by this and did a remarkable job	16:36
	of turning public opinion against Malcolm Fraser	16:38
	the head of the conservative, liberal country part.	16:42
	On the ground that they had violated the spirit	16:44
	of the constitution by denying funds.	16:47
	At this stage Sir John Kerr,	16:51
	who was the Governor General stepped in.	16:53
	You had an impasse, the Senate would not pass these.	16:56
	The government was governing	16:59
	without having any means of getting financed.	17:01
	And he was appointed as I understand it by the Queen	17:04
	but on the recommendation of the Labor government.	17:08
	At any rate, he stepped in, in his formal position	17:11
	and dismissed Whitlam as Prime Minister	17:14
	and named Fraser, asked Fraser to form a government.	17:17
	Upon which Whitlam stepping across the aisle	17:21
	in the House of Representatives called	17:24
	for a vote of no confidence and he has the majority.	17:27
	So there's a vote of no confidence in Fraser,	17:29
	and now elections are scheduled for one month ahead	17:32
	but with Fraser of the head of a caretaker government.	17:35
	It's very hard to know what's going to happen	17:38
	because although one would expect	17:40
	from everything that proceeded that they country,	17:43
	liberal and country party were going to come into power.	17:45
	Whitlam is a very effective campaigner	17:48
	and the particular mode of bringing about an election	17:51
	will undoubtedly lose votes for the liberal country parties.	17:55
	So you don't know what'll happen.	17:58
	I must say had I been a member of the liberal country part	18:00
	or the leader of it I would,	18:02
	I'm not sure I would've wanted to call an election now.	18:04
	Whitlam has gotten the country	18:07
	into a terrible economic situation.	18:09
	Nobody is gonna have an easy time getting it out.	18:11
	I'm not sure that I would want to undertake that task.	18:13
	I think I would rather let him dig his own grave	18:15
	a little bit longer, but I'm not close there.	18:17
	I don't judge the situation and it may be	18:21
	that the danger of the deterioration	18:23
	of the economic situation was so great	18:26
	that it justified the change.	18:28
	At any rate the Wall Street Journal reports	18:31
	that the stock exchange in Australia regards it	18:33
	as a good thing and has boomed.	18:35
	The elections are being held on December 13th,	18:37
	so there's not a long interval to wait	18:40
	to see what'll happen.	18:42
	(laughing)
William	I see.	18:43
	Coming back to the United States,	18:44
	there have been some rumbles out of Washington	18:45
	on possibility of breaking up General Motors	18:47
	and breaking up the big oil companies.	18:49
	What is your reaction to that?	18:52
Milton	Well I think that.	18:54
William	These are recurrent of course.	18:55
Milton	Well these are always recurrent.	18:57
	I think there, the situation is not an easy one.	18:58
	I believe there is a very important sense	19:02
	in which General Motors and the big oil company	19:04
	are bigger than it's economically desirable for them to be.	19:06
	The question is whether the cure	19:10
	of a government forced breakup is a sensible cure.	19:12
	Personally I doubt very much that	19:16
	that's a cure which I think it's likely	19:17
	to do more harm than it will good.	19:21
	On the other hand I believe it's important	19:23
	to look at the source, one, some of the sources	19:26
	of these conglomerations things	19:29
	like General Motors and the big oil companies.	19:31
	And ask whether there's anything there	19:33
	that could be done that would move	19:35
	in the right direction.	19:37
	And here I believe a major source	19:39
	of the growth of such conglomerates has been the tax laws.	19:41
	In particular, the link between the corporation tax	19:47
	and the individual income tax	19:51
	or corporate income and individual income.	19:53
	The situation is the following.	19:55
	Suppose a corporation pays out a dollar of dividends,	19:58
	and you as an individual receive it.	20:04
	You have to include those, that dollar in dividends	20:06
	in your tax, in your income subject to tax.	20:09
	And you will have to pay a tax on it.	20:12
	Suppose you really wanted to save that dollar.	20:14
	Out of that dollar you won't be able to save a dollar.	20:17
	You'll only be able to save 30 cents at one extreme	20:19
	if you're in the very 70 percent tax bracket.	20:24
	50 cents if you're in a 50 percent bracket.	20:26
	70 cents if you're in a thirty percent bracket.	20:29
	Take a 50 percent bracket just to make the situation simple.	20:31
	So a dollar of dividends pays out to you,	20:36
	enables you to save 50 cents.	20:38
	On the other hand suppose the corporation doesn't pay out	20:40
	that dollar of dividends	20:42
	but instead reinvests it within the corporation.	20:44
	It has a dollar to invest.	20:46
	Well if you wanted to save that dollar,	20:48
	because there's no individual income tax.	20:51
	The only time you will have individual income tax	20:53
	on it will be at some future date.	20:55
	When if investing that dollar adds	20:57
	to the value of the stock,	21:00
	and you realize a capital gain on the stock.	21:02
	You may later have to pay a income tax on the capital gain.	21:05
	But that would be less than the current income tax,	21:08
	and in the mean time you will have invested	21:10
	and been earning income on it.	21:12
	In consequence, roughly speaking in such a case	21:15
	if the corporation can invest the money internally	21:19
	at only half the yield that you could get	21:23
	by investing it externally,	21:25
	it will still be worth your while to do it internally.	21:27
	Now this establishes a great incentive	21:29
	for the plowing back of earnings	21:32
	on the part of corporations.	21:33
	Moreover, if a corporation doesn't have,	21:35
	profitable investment activities	21:39
	in its own particular area of production	21:41
	it establishes an incentive	21:45
	for it acquire another enterprise in which it is.	21:47
	So suppose you have a very profitable company,	21:48
	but it's expanded to it's full.	21:51
	There's no incentive to expand further.	21:53
	There's a great tax incentive now	21:55
	for you to use your income to acquire another corporation	21:58
	in which there is an opportunity to invest.	22:01
	And I believe this has been a very major factor	22:04
	that has promoted conglomeration	22:06
	in the expansion of the size of current companies.	22:08
	And in this area I think a much more effective reform	22:11
	than the one that is proposed to break 'em up,	22:14
	Would be a proposal I have urged for many years,	22:17
	which is, well it could go either way.	22:19
	One way would be to permit dividends	22:21
	to be deducted in computing the corporate tax.	22:22
William	Mm-hmm.	22:24
Milton	Another way and I think the more better way	22:25
	would be to require corporations	22:28
	because that gets you into the corporate tax area.	22:29
	Sticking strictly to the individual tax area,	22:32
	would be to require corporations	22:34
	to attribute to individuals the undistributed income.	22:36
	And require individuals to include it	22:40
	on their own income tax return.	22:42
	And that would eliminate this incentive.	22:44
	That's an old proposal but I think it's a very good one.	22:46
William	Milton I wonder if this letter	22:49
	is pertinent at this point.	22:51
	It's a letter we've had on hand	22:52
	for a few weeks from Robert W. Sherman.	22:53
	He says, "Dear Professor Friedman please comment	22:56
	on the enclosed article by Peter F. Drucker	22:58
	which appeared in an issue now a couple months ago	23:00
	of the Wall Street Journal.	23:03
	I would especially like to know	23:04
	if you agree with Mr. Drucker when he states	23:06
	that quote, 'The corporation income tax has	23:08
	become the most regressive tax in our system	23:10
	and a tax on the wage earner and on wages.	23:13
	Eliminating it would probably	23:16
	be the single largest step we could take	23:17
	toward greater equality of incomes in this country.'"	23:18
Milton	I do not approve of the corporate income tax.	23:22
	I think it ought to be abolished.	23:25
	But I don't, neither do I agree	23:26
	with Mr. Drucker's judgment of it.	23:29
	The plain fact is we don't know	23:31
	who pays the corporate income tax.	23:33
	Obviously corporations don't pay it, that's a mistake	23:35
	and it's a major mistake in taxation	23:37
	to think that you can get something for nothing.	23:40
	It's either paid by the stockholders in the corporation,	23:42
	or it's paid by the customers of the corporation.	23:45
	Or it's paid by the employees of the corporation.	23:47
	Or it's paid by the suppliers of the corporation.	23:50
	But while there have been many studies made	23:52
	in attempting to isolate the incidence	23:55
	of the corporate income tax, I do not believe	23:56
	there has been any satisfactory analysis	23:59
	of it's distributive impact.	24:03
	So I would not say that it is the most regressive	24:05
	of the taxes in fact I think the most regressive	24:07
	of the taxes we have at the moment	24:09
	is the Social Security tax.	24:11
	Tax on employers income, but at the same time	24:12
	I believe the corporation tax should be abolished.	24:14
	And the reason I believe it should be abolished	24:15
	is precisely because I believe it is politically	24:18
	and economically desirable that we know	24:22
	on whom we levy taxes.	24:26
	That there be a open and above board	24:27
	and not concealed in this way.	24:30
	And the earlier suggestion I made	24:31
	for attributing undistributed income,	24:34
	would remove the only plausible excuse	24:36
	that there is for the corporate tax.	24:38
	That it is a device to prevent people	24:40
	from evading personal income tax by plowing back earnings.	24:42
William	Thank you very much we've been visiting	24:48
	with Professor Milton Friedman.	24:50
	The eminent economist from the University of Chicago.	24:51
	If you subscribers would like to suggest subjects	24:54
	for Dr. Friedman to discuss on future tapes	24:57
	or pose questions for him to answer.	24:59
	Please write to Instructional Dynamics Inc.	25:02
	4-5-0, 450 East Ohio Street,	25:05
	Chicago, Illinois 60611.	25:10
	We'll be visiting with Dr. Friedman again	25:13
	in a couple weeks hence.	25:15

Item Info

Title:

Tape 180 - Monetary Testimony, Australia, Corporation Taxes

Contributor:

Friedman, Milton, 1912-2006

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audiocassettes

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English

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Paul A. Samuelson papers, 1933-2010 and undated

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Paul A. Samuelson papers, 1933-2010

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Economics Cassette Series: Milton Friedman

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samuelsonpaul
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ark:/87924/r49k4689n
b225fc64-0b31-4b0a-b6cb-f8a8dcdc910f

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Tape 180 - Monetary Testimony, Australia, Corporation Taxes

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