Sunday, January 6,1980
AS THE ECONOMY heads into a decline this year, one of those ÛÏtruismsÛ weÛªll be hearing with seductive regularity is that business needs a tax break in order to stimulate investment and jack up lagging American productivity.</br></br>ItÛªs even likely that Sen. Edward Kennedy, anxious about his ÛÏradicalÛ economic-policy image, will make an obligatory bow in this direction.</br></br>The trouble is that there is no hard evidence that more favorable tax treatment for business promotes significant increases in business investment, or that it is a good antirecessionary device.</br></br>As a matter of fact, there is plenty of evidenceÛÓ as gathered in a 1978 report by the General Accounting Office ÛÓ that much of the business spending attributed over the years to such devices as the investment tax credit would have taken place anyway.</br></br>But a recent barrage of propaganda from business groups promoting a better tax break has worked its way into the literature of government speech-making, congressional reports and so on.