An immediate tax cut would stimulate our lagging economy and prevent it from getting worse. There is a worthwhile proposal abroad to end the double taxation of dividends. Dividends are paid from corporate current or prior retained earnings upon which the corporation already has paid income taxes. The same net income, in the form of dividends, is distributed and taxed to its shareholders.

There should be only one tax, to the shareholders receiving the cash, and a dividends-paid deduction allowed to corporations. Such action by Congress would allow corporations to immediately invest their tax savings in new and replacement plants and equipment, leading to a resumption of full employment and economic growth.

An alternative proposal to eliminate the tax on dividends received by shareholders might result in a small, temporary increase in consumer spending, but would not help the economy in the long term. Only capital investment by corporations can do that.

Whether elimination of the corporation income tax applicable to income from which dividends are paid is politically achievable, I leave to my congressional delegates. Politically, a combination of corporate deduction and individual exclusion from income may be necessary.

Happily, we Republicans control both houses of Congress. In this warm parliamentary environment, a window of opportunity is wide open to bring taxation policy and economic reality together for the benefit of all Americans.

Carle G. Gray

Sullivan