The National Urban League said yesterday it opposes President Carter's plan for a $25 billion tax cut to pump up the economy because too little of the benefit would go to blacks and U.S. cities.
A tax cut would be "unwise" because it would go to all segments of the population and provide "an excuse for not implementing vitally needed urban and social programs" aimed mainly at the poor, league president Vernon Jordan Jr. said.
A similar position has been taken by economist John Kenneth Galbraith in behalf of Americans for Democratic Action.
Jordan announced the league's somewhat surprising stand at a press conference called to make public a report titled "The State of Black America: 1978."
That report is bleak. Whites think blacks have made significant progress in the last 10 years, but the truth is that blacks as a group "have not seen their status materially improved over the past decade," it says.
It cited statistics. The number of whites living below the official federal poverty line dropped nearly 20 per cent, from 4.1 million to 3.4 million, in the 10 years 1966-76. The number of blacks below the poverty line stayed at 1.6 million.
The median family income of blacks was 58 per cent of that for whites in 1966. It rose to 61 per cent in 1970, but by 1977 had fallen to 59 per cent - "a net gain of 1 per cent at the close of the 10-year period."
Some blacks have broken the mold, the report says; from 1966 to 1976, for example, the proportion of black families with incomes of $15,000 or more increased twice as fast as the proportion of whites in that group.
But the successfuly remain the exceptions, according to the report. "These statistics" showing improvement "should not be viewed in isolation; for, when placed against the statistics of blacks still in poverty, they indicate the disturbing duality of the black economy - a slow-growing black middle-class and an increasingly jobless lower economic class."
The report noted that a high percentage of black children live in families headed by women. By implication, these are families where the wages earned by older children can be important. Yet among black teenagers the unemployment rate is almost 40 per cent, the league reminded.
According to Jordan and the report, the "key national issues" facing blacks this year are the proposed tax cut the development of an urban aid policy, jobs and welfare reform.
The latter three issues hinge on the outcome of the administration's expected $25 billion tax cut proposal, according to Jordan and Bernard E. Anderson, an economist at the Wharton School-University of Pennsylvania who wrote the economic section of the league report.
Rather than a broad tax cut, Jordan said the league would favor individual tax reductions "limited to replacement of the increase in the Social Security tax," and tax benefits for business "targeted to encouraging job-producing investments in urban and high unemployment areas, and to hiring and training youth and long-term unemployed workers."
"Such a tax policy would directly tackle the biggest economic problem - employment - and thus revitalize the general economy," he said.
Anderson said the tax cut proposal is based on the "trickle-down theory, which has not benefited blacks very well."
Thus, it is hoped that a reduction in taxes would stimulate investment and spending, boost economic growth and create jobs. But even if that happens, the odds are that blacks and the cities won't significantly benefit from that growth, Anderson said, because of the high unemployment rate for blacks (12.5 per cent) and the problems of the cities in keeping jobs.
"What you need is a special tax incentive program to get businesses to locate in low-income areas, and tax benefits to subsidize the salaries" of so-called "hard-to-employ" person said Anderson, echoing some recommendations made last week by the Committee for Economic Development, a national group of business and education leaders.
Administration officials have indicated that the expected tax cut proposal will be geared to persons with low and moderate incomes, with the largest benefits going to those who earn below $10,000 annually.
There was no immediate administration response to Jordan's remarks, which marked the second time since July that he has publicly taken Carter to task on black and urban issues.
Though "disappointed" by many of the administration's programs, Jordan said the Carter team can be given some credit for "positive steps (taken) in recent months."
They include the expansion of public service employment, a youth jobs program, a plan to revise the welfare system and one strengthening federal equal opportunity enforcement agencies, Jordan said.
But he added, "More, much more is needed by way of federal actions to assist poor people and the cities."
The "matter of perception" is important in understanding the state of Black America in 1978, Jordan said in the report.
He said that while many blacks believe they have made little or no progress in the past 10 years, "most whites think that very little discrimination exists against blacks today."
Whites who believe blacks have little to fuss about operate on "perceptions formed by the media; by impressions derived from family, friends and associates, and by their institutions, but rarely by a firsthand knowledge of how blacks live or how they think," Jordan said.