An article yesterday reported that Rep. Al Ullman (D-Ore.), chairman of the House Ways and Means Committee, dismissed as inconsequential the opposition of the National Urban League to President Carter's new tax cut proposal. While Ullman's remarks were quoted correctly, he actually was referring to the opposition by the National Association for the Advancement of Colored People to the President's energy bill. Ullman has not taken a position on the Urban League statement.
The chairman of the House Ways and Means Committee said yesterday Congress probably will reconsider the Social Security financing system next year in hopes it can find an alternative to some of the hugh increases in payroll taxes it passed last month.
Rep. Al Ullman (D-Ore.) said the lawmakers will "look at" proposals to bolster the program by using income taxes rather than Social Security taxes to pay for Medicare, and by requiring federal, state and local government employees to participate in Social Security.
He also sketched out a plan to replace a substantial portion of the payfoll tax in later years by adopting a new form of national sales tax that would be imposed primarily on wholesale industrial products. The proposal would be modeled on the European "value-added" tax.
Ullman made his remarks at a breadfast with reporters at which he also said he will seek to expand the investment tax credit for business beyond what President Carter is expected to propose, by allowing firms an extra writeoff if they renovate existing facilities in areas where the johless rate is high.
Separately, Ullman dismissed as inconsequential the newly announced opposition of the National Urban League to Carter's new tax cut proposal. The league complained on Tuesday that too little of the tax cut's benefits would go to blacks and central cities.
Ullman said yesterday the league's position "doesn't make any sense" and therefore won't have much impact on Congress. "If that kind of opposition were based on any meaningful, substantive issue, I think it would complicate things, but I don't think it is," he said.
The chairman's remarks about reconsidering the Social Security financing issue came in response to questions about a possible taxpayers' revolt over the new payroll levies. The maximum payroll tax rose to $1,070 Jan. 1, from $965 last year. By 1986, it will soar to $2,874.
Ullman said that "there's no real way of opening up the Social Security issue agoin this year," and added that if "there really is a time-bomb, it's of longer duration" - beginning in 1979 and later, when more of the tax inreases Congress voted will go into effect.
The two proposals Ullman outlined for consideration next year are short-term measures. The one involving Medicare could prove especially controversial, since it would mark the first time Congress has approved using income tax monies to help finance Social Security.
Traditionally the lawnmakers have resisted any such step on grounds it would destroy the relationship between what taxpayers pay into the system and what they later receive in benefits.
Requiring government workers to participata in the Social Security program would bring in an estimated 6 million new contributors. However, the move would add to the system's reserve for only a few years - until the new participants began to qualify for benefits.
The sales tax measure Ullman proposed for future years would tax the value added to a material or product at each state of its processing or manufacture. Ullman said the levy would be applied only to industrial, on "non-consumptive," products.
As in any form of sales tax, the tax ultimately would be passed on to consumers. However, Ullman conceded under questioning that his own proposal may be more attractive politically because the tax would actually be levied only at wholesales, and therefore hidden from consumers.
AT the same time, he also insisted the sales tac approach would be preferable to using the present payroll tax, which hits lower-income persons proportionally harder than his own proposal or the general income tax. Continuing to rely on payroll taxes, he said, "will be a little difficult."