20 - M ANCHKSTEH H K H Al.l), Thursday, August 9, 1984 BUSINESS Boxing scoring causes Opera tenor to highlight Interiors Indexing wins praise, but not from IRS hard feelings at Games band shell Italian test for 1984 Business ... page 14 ... page 11 supplement inside according to the Internal Revenue Service, is $1,203 In Brief What is income tax indexing'? plus 18 percent of the amount over $10,800. Slipping quietly into our consciousne.ss — seemingly But with the hypothetical increase of 10 percent in from nowhere — is this concept President Reagan the CPI, the brackets would be adjusted by 10 percent insists is essential to his entire tax program, and Your — to $11,880 and $14,900. which is splitting the White House and Congress. It is Money's The amount of tax owed would become $1,203 plus 18 slated to turn into one of the most controversial ^ I I percent of the exce.ss of $11,880. features of the Reagan era. Yet, despite general Worth The savings in dollars can be significant. If you are ignorance and befuddlement. indexing is scheduled to single and earn, say, $50,000 in 1984, you would pay Some clouds tonight; begin in January 1985 — only months from now. Sylvia Porter Manchester, Conn. $13,889 in taxes (based on the standard deduction). If The iirinciples underlying indexing are relatively you are married and filing jointly, you would pay mostly cloudy Saturday Friday, August 10, 1984 simple. Its proponents argue that it would halt "bracket creep." the phenomenon that occurs when $11,368 us a couple. — See page 2 But say indexing is in effect. If inflation were at Single copy: 25C the pace of inflation shoves you into higher and higher rate of 4 percent, you, the single taxpayer earning tax brackets even though your actual income docs not The base lor indexing would be 1983. Every year, Hanrhpatpr Ifralh $50,000 in 1984, would pay $13,588 and you. the married buy more goods and .services. Under indexing, the from 1985 on, each tax bracket, the standard couple, would pay $11,033. At an inflation rate of 7 standard deduction, personal exemption and lax deduction, and the personal exemption would be percent, the savings would be higher. You, the single brackets would be automatically adjusted to prevent adjusted to reflect the increase in the Consumer Price taxpayer with a taxable income of $50,000 would pay bracket creep from taking place. Index (CPI) for the previous fiscal year over the base $13,359. and you, the married couple, would pay The IRS benefits from inflation and doesn’t deny it. year of 1983. $10,779, according to Peat Marwick culculations. The Joint Congressional Committee on Taxation has Although indexing is slated to begin next January, Marine estimated that for every 10 percent increase in most of you would not notice the effects until you filed What’s more, the savings would be larger in the nominal income, taxes rise 16.5 percent. Thus, the IRS your '85 lax return — meaning not until April 15,1986. lower tax brackets. The whole subject of indexing will Wholesale be far, far clearer afterthe debates on the subject that receives more revenues even when taxes are not Suppose, for instance, that the CPI increases by 10 directly raised. percent over the base year of 1983. The standard must come. (Even to me, after prolonged study, it still missions To illustrate, if indexing were in effect, the IRS deduction, now $1,000, would automatically become has the clarity of the mud outside the windows after would lo.se an estimated $6 billion in 1985, $17 billion in $1,100 — 10 percent plus the previous $1,000, the recent rainstorms.) 1986, $28 billion in 1987, $40 billion in 1988 and $65 billion Seated: House (left), Hale Indexing also would result in adjustments in the If indexing becomes law, and you estimate your in 1989. actual brackets. quarterly tax payments, you would start to see the to begin Standing: Chipokas, Novak No wonder the controversy over indexing when your inflation difference in your taxes one year from now. The IRS government faces such enormous deficits! But Imagine a single taxpayer in the 18 percent bracket, must have the new tax tables ready no later than Dec. Heritage makes appointments indexing would affect every one of us, as taxpayers. which at this time means an income of at least $10,800 By Noe Lelva Here’s how indexing would work: but not more than $12,900. The amount of tax, 15. 1984. United-Press International Heritage Savings and Loan Association of Manchester has announced the appointment of Ships carrying an estirnated new officers following its merger with Fidelity 2,100 U.S. Marines will arrive off moderate Federal Savings and Loan Association of New Baby boomers Central America’s Pacific coast as 0 Haven, which became effective Friday. about 250 U.S. Arm y troops in The appointments are: Peter G. Chipokas, vice Honduras conduct spy flights over By Denis G. Gulino chairman of the board ;ind president of the New suspected rebel posts in El Salva­ United Press International Producer Price Haven division: Betty R. Sullivan, executive vice consider ethics dor, sources say. president at New Haven: Robert W. Mills, vice In Costa Rica, President Luis W ASHINGTON - Wholesale Index 292.6 president and director of marketing; Dorothy M. Alberto Monge Thursday dis­ prices climbed a moderate 0.3 For Finished Goods Musco, vice president: Barbara A. Scirocco, vice in investments missed as a “crazy idea" news percent in July, the most iii four (unadjusted) president, branch coordinator and loan manager reports that a coup attempt was months, as pork and beef costs went up but ga.soline and fuel oil 290 of the New Haven division: Jeffrey P. Chipokas, possible, but civil guard forces in 1967=100 assistant vice president and manager of the the capital remained on alert. got cheaper, the Labor Depart­ Hamden office: Elizabeth D, Gentile, assistant By Carol Rosenberg In El Salvador, leftist rebels ment said today. vice president and savings manager of the New United Press Internotlonal freed a lawyer who was abducted Even with the month’s increa.se, 288 Haven division: Denise M. Jones, assistant vice in March and a doctor after the the department’s Producer Price president and manager of the Tolland office: BOSTON — A decade after they staged campus \ victims’ families paid an undis­ Index reflects a wholesale inflation Marie E. Ronzo, assistant vice president and sit-ins to protest their schools’ stockholdings. closed ransom, relatives said. rate so far this year of only 2.9 286 manager of the East Haven office; Margaret America’s college students of the '70s are demanding The U.S. forces in Honduras are percent, department analysts Tomlinson, assistant vice president and manager that their own newly earned money be invested with to carry out reconnaissance mis­ said principles, too. w The overall food index went up of the Milford office; Mary F. Torello, assistant ' M l sions over suspected rebel hi­ 284 vice president and manager of the West Haven What began as a movement to keep colleges from deouts along the Honduran-EI If---' 1 4 percent, the most since Janu­ office; and Grace B. Vossen, assistant vice supporting companies making money from South Salvadoran border, timed to coin­ ary, led by pork prices president and manager of the Glastonbury office. Africa’.s apartheid regime has matured with the cide with the Salvadoran army’s Agriculture Department ana­ Elected to the board of directors were Peter G. once-radical student protesters. operation in rebel-dominated Cha- lysts have been predicting Ingher 282 Chipokas, former president of Fidelity. Stephan latenango province. prices for meats all year La.st U 1 L. Hilcoff and David J. Chase, all previously “ The baby boom generation has grown up. But they Military sources said 2.50 U.S. summer’s drought and the higher members of the Fidelity board of directors, still have an underlying need to have their money used personnel from the 244th Military cost of feed grains encouraged 280 Charles S. House will remain chairman of the in a socially responsible fashion," said George Intelligence Batallion at Hunter producers to sell more pork and merged bank, while William H. Hale will remain Pillsbury, 35. who as a student at Yale marched Army Airfield in Georgia arc beef, temporarily bringing prices JJASONDJ MAMJJ A the president and chief executive officer against that school’s investment policy. stationed at the Paimerola mil­ down until the supply tightened. itary base, 30 miles north of r ’ ' Pork prices were up 8.3 percent Pillsbury, heir to the Minneapolis-based Pillsbury Tegucigalpa and 78 miles from the in July after dropping the previous Co., has a trust fund of his own to grapple with these Salvadoran border. m months. Gottlieb vice president days. Like many of his peers, his standards preclude The U.S. Embassy spokesman in Beef prices, up 2.6 in July, Sylvia Gottlieb of Manchester has been buying stock in companies he sees making money dropped 7.8 percent in May pnd trends that evcniually show up at unethically Honduras, Robert Callahan, re­ retail outlets. appointed executive vice president of sales and another 1.8 percent in June. fused to say what types of planes The index did not move at all in merchandising and But ga.soline and fuel oil prices In his case, that means he won’t buy shares in would be used but said the May or June.