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SIA PROPOSES FISCAL POLICY MEASURES AIMED AT ENSURING LONG-TERM ECONOMIC GROWTH AND JOB CREATION

 WASHINGTON, Feb. 10 /PRNewswire/ -- The Securities Industry Association, in a Feb. 1 letter to President Clinton, proposed a series of fiscal policy measures "to enhance economic growth and ensure the U.S. strengthens its role as a leading economic power," the Association said Wednesday.
 In the letter, Thomas M. O'Donnell, SIA chairman and Marc E. Lackritz, SIA president, recommended U.S. tax and fiscal policy in 1993 focus on deficit reduction; implementation of saving and investment incentives; and promotion of job creation and business investment.
 "We strongly believe that a tax and fiscal policy plan which contains stricter controls on federal spending, a reduced capital gains tax rate, a universally available I.R.A. and effective and efficient incentives for job creation and business investment would do much to start America's renewal," they said.
 The letter was also sent to the Economic Security Council and members of the congressional tax-writing committees.
 "Our members have special expertise in the capital-raising process and markets and the impact of policies on them," Lackritz and O'Donnell noted, and said the securities industry is eager to work with the Administration to rebuild the economy and restore its health and international competitiveness.
 Program Stresses Deficit Reduction, Incentives
 The tax and fiscal policy program, developed by SIA's board of directors, suggests a $150 billion reduction in the federal budget deficit over the next four years, and recommended a combination of spending cuts, new taxes and efforts to contain the growth of mandatory spending, particularly health-care outlays, to achieve that goal.
 "In addition, the enactment of a broad based energy tax with proceeds dedicated to deficit reduction would represent sound fiscal policy," Messrs. O'Donnell and Lackritz said.
 "Such a tax has the added advantage of addressing conservation and environmental concerns," they noted.
 I.R.A.S. Capital Gains Tax Cut Proposed
 SIA also recommended the implementation of a series of saving and investment incentives tax incentives such as expanded Individual Retirement Accounts (I.R.A.s) and a meaningful across-the-board reduction in the capital gains tax rate to enhance economic growth.
 "Without adequate capital," Messrs. O'Donnell and Lackritz stressed, "economic growth and job creation will remain sluggish and leave unemployment at unacceptably high levels."
 "Restoring the fully deductible IRA for all Americans may well starve off a future crisis in financing retirement needs and health costs, while broad-based and meaningfully lower capital gains taxes would help channel monies to new start-ups as well as existing firms for new plant and equipment and other long-term investments," they said in the letter.
 SIA said it recommends a 50 percent exclusion applying to real gains on assets held at least one-year.
 To offset any potential losses resulting from I.R.A.s and lower capital gains tax rates -- losses SIA said it doesn't anticipate -- the Association proposed an increase of one to three percentage points in the tax rate on the upper income group making $200,000 a year or more.
 In 1992, SIA had proposed a one or two percentage point increase.
 As a short-term stimulus, SIA also stated it supports proposals that efficiently create jobs and/or stimulate investment through job tax credits and/or investment tax credits.
 SIA is the securities industry's trade association, representing the business interests of nearly 700 securities brokerage and investment banking firms in the United States and Canada. Collectively, they account for more than 90 percent of securities activity in North America.
 -0- 2/10/93
 /CONTACT: Karen San Antonio of Securities Industry Association, 212-608-1500/


CO: Securities Industry Association ST: New York IN: FIN SU:

TS-KW -- NY072 -- 5229 02/10/93 14:18 EST
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Date:Feb 10, 1993
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