Word: dillons
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...time has come when our tax laws should cease to encourage luxury spending as a charge on the federal treasury," said Treasury Secretary Douglas Dillon last week, testifying before the House Ways and Means Committee. That cherished lubricant of modern business, the deductible expense account, was the object of the Administration's tax raisers, who hope to pick up $250 million a year on no-longer-deductible third martinis and seats on the aisle...
...Instead Dillon proposed a private enterprise version of the Government's rigid per diem system. Since traveling civil servants get only $12 a day for expenses, explained Dillon (himself a millionaire stockbroker), businessmen should learn to subsist-at least for tax purposes-on a $30 daily allowance. He was prepared to concede a daily allowance ($4 to $7 per guest) for "modest" business lunches, but coldly proposed eliminating all deductions for expenses incurred for business entertaining "at such functions as parties, nightclubs, theaters, country clubs and fishing trips...
...back up his case for these "realistic recommendations," Dillon cited some of the more zany abuses of the expense-account society. He told of undertakers who deducted $35,000 for operating a yacht on grounds that clergymen and others connected with their business had to be entertained in a more cheery atmosphere than that afforded by a mortuary, of a company that got a $16,943 business deduction for "use of yacht to demonstrate to customers the value of sneakers with nonskid soles...
...well-upholstered owners of well-upholstered restaurants wailed that they would be put out of business. But many businessmen agree that expense-account living (particularly by others) has got completely out of hand-partly, as Dillon concedes, because leniencies in the tax laws have encouraged companies to use expense accounts as weapons of competition or inducements for highly taxed executives...
...long-standing difficulties of the Eisenhower Administration was its inability to persuade Congress to abolish the 4¼% interest ceiling on long-term (over five years) Government securities. The Kennedy Administration last week got around the problem deftly. In a letter to Treasury Secretary Douglas Dillon, Attorney General Robert Kennedy ruled that it was legally permissible for the Government to offer long-term bonds at a discount provided the coupon interest rate did not exceed 4¼%. Thus, a long-term $1,000 bond could be sold for $950, with the $50 discount in effect boosting the yield...