A group of economists has urged President Carter to abandon plans for a tax cut this year on grounds that tax cuts help the middle and upper class rather than the poor.
"The effect of tax cutting is to expand the purchases of consumer goods by the relatively affluent two-thirds of our population," John Kenneth Galbraith wrote Carter in a letter co-signed by six other economists.
"We cannot avoid the though that we are expanding such consumption at a time when our cities and their services are in desparate need, when urban services in the ghettos are appaling, when educational recreational and park budgets have been severely curtailed, when streets are unsafe and filthy, when health and welfare reform are being postponed at least partly because of their cost," the economists said in aletter released yesterday.
They also accused Carter of following the same tax advice that led to the defeat of Gerald R. Ford. The failure of Ford's 1975 tax rebate to reduce inflation or unemployment, they said "had much to do with the election outcome in 1976, President Ford was, in a very real sense, the victim and you were the beneficiary of this economic advice."
The group also warned Carter not to put a premium on courting business, claiming that only three Presidents in the last 40 years have enjoyed "supreme business confidence" - Herbert Hoover, Richard M. Nixon and Ford.
"Mr. Hoover presided over the worst depression in our history; Mr. Nixon presided over the worst inflation in our peacetime history; Mr. Ford presided over the worst recession since the Great Depression," the economists said.
They urged Carter to adopt a broad program aimed at the needs of the cities and the poor, including welfare reform and increased public employment programs.
Those signing the letter, released by Americans for Democratic Action, were Galbraith, a former ADA president; Marcus Alexis of North-western University; Charles Killingsworth of Michigan State University; Robert Lekachman of the City University of New York; Robert R. Nathan, presdient of Robert R. Nathan Associates; Melville J. Ulmer of the Unversity of Maryland and Paul Davidson of Rutgers University.