NEWS CONFERENCE 71

A. I wouldn't say that they were. I'd have to hear from the mayor
this afternoon. I could answer your questions a lot more specifically
if I knew what was on the City's mind, but I don't at this point.

Q. What time are you meeting the mayor?
A. I believe it's 3: 00.

Q. Governor, what's your reaction to the alternate tax proposal by
Hess and Warfield?

A. Well, I said when the proposal was made — and apparently this
is basically the same proposal that County Executive Anderson is
espousing — I said when the proposal was advanced, I think it is a
legitimate alternative. I do not approve of it because the purpose of
tax reform in my opinion is the elimination of as much regressivity
as is possible and I don't feel that the utilization of the sales tax ac-
complishes this. It is a known fact that the people in the lower in-
come brackets spend \i/2 percent or more of their incomes for sales
taxes whereas people in a higher bracket spend only 1 percent. And
the people who are most adversely affected by the sales tax, of course,
are young marrieds. These are people who have to buy washing ma-
chines, dryers, refrigerators, stoves, all of the major appliances that
the sales tax hits the hardest. Now I think that the other proposal on
the other end of the spectrum, by Montgomery County, that the in-
come tax be graduated more steeply is one idea, the Hess-Warfield
plan is another idea, and it seems that what we have come out with
is a legitimate compromise between the two trains of thought. So I
am going to stick with the Hughes plan, the plan that was evolved
with the assistance of the fiscal research people and the people that
know most about the subject.

Q. Do you feel that the final plan may accomplish the other two
proposals?

A. I'm sure there are going to be some compromises but I would
hesitate to say how far we should back off the original proposal by
the committee. From what I've seen and what has been offered so
far, the original proposal is the best proposal for the State.

Q. Governor, you said you would veto continuation of the earnings
tax. Would you also veto Hess-Warfield as it now stands?

A. Certainly if I were left with only Hess-Warfield and no other
alternative, I couldn't veto it; it wouldn't be a responsible act. It's
better than the earnings tax obviously.