DAEL WOLFLE 



imbursed under its government contracts. The attitude of direc- 

 tors and stockholders toward reduced profits requires no com- 

 ment. 



It seems to be clearly in the national interest for the federal 

 government to help its major contractors to keep in the fore- 

 front of an advancing science and technology. Discussions 

 between industrial and government (primarily Department of 

 Defense) representatives should lead to a solution of this 

 problem. 



Possible Changes in Federal Taxes 



Colleges and universities need unrestricted funds, and 

 as one source of such funds they are relying increasingly on 

 gifts from alumni, parents of students, industrial friends, and 

 other supporters, both private and corporate. The proposal intro- 

 duced by Paul Klopsteg and endorsed by a number of other 

 participants is designed to produce a substantial increase in the 

 volume of these gifts. The gist of the suggestion is that the 

 internal revenue code be amended to permit both private and 

 corporate gifts to institutions of higher education to be treated 

 as credits against income tax instead of as deductions in com- 

 puting adjusted gross income. The amount of credit would be 

 limited to a percentage of adjusted gross income, but the credit 

 itself would be so handled as to equalize the out-of-pocket costs 

 to taxpayers of high and low income for each dollar they give 

 to institutions of higher education. 



At present it costs a person in the highest income tax 

 bracket only 9 cents to make a one-dollar gift to a university or 

 college, while it costs a person in the lowest tax bracket 80 cents 

 to make a one-dollar gift. This difference results from the 91 

 per cent and 20 per cent tax rates for the highest and lowest 

 taxable income groups. The incentive to make such gifts is 

 clearly greater for the man in the high tax bracket, and such 



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