Soloway Says Unearned Income From Rentals Should Be Taxed

Arnold M. Soloway, assistant professor of Economics, last night continued his attack on Governor Furcolo's proposed sales tax and suggested a tax on income from rentals to help ease the state's financial burdens.

In a radio interview, Soloway attacked the idea that there is "anything more holy" about unearned income from rents than from stock dividends, which are now taxed more than twice as heavily as earned income.

He also referred to a newspaper article by Christian A. Herter, Jr. '41, which said that it would take four years for legislation enacting a graduated income tax to be passed. He said that while he favored enactment of such measures "at the earliest possible moment," in the meanwhile, present tax laws could be applied to supply the needed income.

Furcolo's budget was "not a good budget," he charged. He said that his study of state finances, made last year for the A.D.A., had indicated that a budget of about $80 million was needed, about $55 million of which would go to cities and towns.

Soloway asserted that his opposition to the proposed sales tax was "not based on the simple doctrinary thesis that the sales tax is an evil thing," but rather on the grounds that there is "absolutely no need" for the tax.

Soloway also said that his plan called for a slight lowering of corporation taxes, but noted that the state would never regain much of the textile industry it has lost. Although all the southern states which have absorbed the textile industries have graduated income taxes, the absence of unions provides a supply of "cheap labor," which Massachussetts cannot provide. He noted, however, that the lowered corporation taxes might attract technical industries."

If the graduated income tax is set up, a witholding system might be the most effecient and effective way to collect it, he declared.