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SIA: LACKRITZ URGES SECURITIES INDUSTRY TO USE ITS KNOWLEDGE TO HELP RESTORE NATION'S LONG-TERM ECONOMIC GROWTH, JOBS

 LA QUINTA, Calif., March 5 /PRNewswire/ -- The securities industry must use its knowledge to help meet the national challenge of "restoring the American dream of long-term economic growth and job creation," and demonstrate it "is part of the solution, not part of the problem," Marc E. Lackritz, president, Securities Industry Association, said in remarks prepared for delivery here today.
 Mr. Lackritz told a meeting of senior officers of SIA's Western District member firms the President Clinton has provided "a start to curing the disease of deficit spending," and "it is up to (the securities industry) to help determine the appropriate remedy."
 The securities industry has historically been a critical source of capital for business, government and consumer, especially during the most recent economic downcycle and now has the opportunity to finance the economic recovery, he emphasized.
 In addition, in an effort to constructively assist in rejuvenating the economy, SIA has offered a plan to help federal policymakers tackle the huge federal budget deficit and create a fiscal policy which will enhance economic growth, he said.
 He also reiterated SIA is encouraged that President Clinton has proposed a package that makes a serious effort to reduce the deficit, but suggested it place more emphasis on spending cuts and savings and investment incentives.
 Reviews SIA Proposal
 SIA's plan focuses on deficit reduction, promotion of saving and investment, and implementation of job and business incentives.
 "What is most important ... isn't necessarily that SIA's plan differs from the President's, but that the country is focused as it hasn't been before on the absolute necessity to reduce the budget deficit and revive the lagging economy," Mr. Lackritz said in the prepared remarks.
 SIA's plan suggests reducing the annual federal deficit by about $150 billion over the next four years, requiring additional revenues and reductions in the growth of future spending.
 Among the directions which might be taken is an energy tax, which would lower the deficit while addressing conservation and environmental concerns, he said in a review of the plan which was announced in mid- February.
 The plan also strongly urges saving and investment incentives to increase funds available for capital formation and to encourage individuals to save for the future. Broad-based lower capital gains taxes would help channel funds to start-up companies as well as to existing firms for new plant and equipment and other long-term investments, Mr. Lackritz said.
 Pleased Clinton Plan Doesn't Raise Capital Gains Tax Rate
 Mr. Lackritz said while SIA believes the capital gains tax rate should be reduced, the Association is "pleased the president's plan doesn't raise it at the same time as it is raising the marginal tax rate on upper income taxpayers.
 There also must be some relief from the bias in the tax code against equity investment, he said. He noted inflationary gains are subject to tax, dividends are taxed twice and capital losses are limited to an annual $3,000 deduction.
 SIA's plan also urges restoration of the fully deductible Individual Retirement Account, a "popular" retirement savings vehicle, which "may well stave off a future crisis in financing retirement needs and health costs," he said.
 To offset any potential revenue losses associated with the implementation of incentives, SIA's plan also proposes an increase of one percentage point to 3 percentage points in the tax rate on those making $200,000 or more.
 Mr. Lackritz noted President Clinton's plan includes an even larger increase in the marginal rates which would be applied to deficit reduction and not to saving and investment incentives.
 He urged the consideration of additional options to control the growth of mandatory spending "to achieve the important policy objective of promoting much-needed saving and investment in this country."
 Other Issues Discussed
 In his prepared remarks, Mr. Lackritz also told the group:
 -- SIA is committed to working at the federal and state levels to create a legislative and regulatory environment which encourages and facilitates new products and services for firm customers and reduces costs;
 -- In the last year, SIA tripled its state governmental affairs staff and steadily increased the budget for state activities over the last several years;
 -- SIA is increasing its "grassroots" activities so federal and state policymakers hear directly from member firm officials about issues which affect them; and
 -- It is essential the industry convey to state legislators that many tax proposals are self-defeating and discriminatory, and that revenue-raising must be done across-the-board and fairly.
 The address to the Western District meeting is Mr. Lackritz's first since he became president in December 1992. Earlier, he was executive vice president and head of SIA's Washington office.
 SIA is the securities industry's trade association, representing the business interests of nearly 700 securities brokerage and investment banking firms in the United Sates and Canada. Collectively, they account for more than 90 percent of securities activity in North America.
 -0- 3/5/93 R
 /CONTACT: Art Samansky or Karen San Antonio of Securities Industry Association, 212-608-1500/


CO: Securities Industry Association ST: California IN: FIN SU: ECO

GK -- NY039R -- 3559 03/05/93 15:59 EST
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Date:Mar 5, 1993
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