Evening star., 1945-08-10

important 90 FRANK II. heht'
mestic matters cannot yet be clear
ly discerned.
For example, taxes. These, of
course, concern everybody. Yet,
from neither Mr.. Truman nor his
new Secretary of the Treasury has
there come a revealing word. No
one knows what they think or what
they want. However, this has not
prevented emphatic expressions
from a good many others. who will
have more or less to do with the
subject.
AS things stand, there are three
distinct groups urging three dis
tinct lines of action. One of these
is frankly political. Another is
mostly economic but with a poll
tical tinge The third is wholly
economic, not in the least political.
The rule is that when a political
argument clashes with an economic
argument it is the former which
prevails. And that rule is apt to be
followed in this issue unless Mr.
Truman, unexpectedly, turns nom
political on it.
The George Proposal.
The proposal, which is mostly
economic and only slightly political,
comes from Senator George, chair
man of the Finance Committee,
whose views on taxes are more i'm
portant than the views of any other
member of Congress.
He favors an $4,000, 100000 cut in
taxes the first year after the Japa-
nese war ends, but insists that this
should involve little reduction in
individual income tax. For the sake
of business he wants it to apply
largely to corporations. In brief, he
believes repeal Of the eXcess-prof1t
tax Immediately after the war Is
essential. Also, he wants some Of
the war excise taxes abolished and
some relief" for individuals.
Strong support for Senator
Georges idea is found among busi-
nessmen and the politics in the
suggestions of some relief" for in
dividuals is extremely slight. In the
main. it represents the views of an
honest and able man who wants
to deal with the subject in the ma
tional interests as whole.
It is thus in contrast with the
ideas of a considerable number OF
Democratic and Republican mem
bers of the House, all of whom
come up for denomination and cleo
ton next year. These emphatlcaIly
do not want to wait for a tax reduc-
ton bill until after the war ends.
REGARDLESS of the war situation,
they advocate large tax cuts in 1916
which by no means will be mostly
on corporate taxes, though they are
willing for some cut in them. On
the contrary, they urge the wiplng
out of the consumption taxes on
liquor, cigarettes, gasoline, etc, and
also a 10 to IS per cent cut in the
withholding taxes be made at once
and a general lowering of rates on
the lower income brackets.
This is the political idea. 1t comes
from men who believe it will mean
votes if they can go before their
constituents with record of hav-
ing either reduced or tried to reduce
their, taxes all along the line.
This group takes no thought OF
balancing income with outgo, Ap-
parently it is willing to continue
piling up larger and larger deficits
and higher and higher debts on the
silly theory that there is no danger
in that because I'VE owe the debt TO
ourselves" Inoculated years ago
with the old soak the rich and give
the poor a free ride" tax doctrine,
they are either blind or Indifferent
to fiscal realities.
The third group of tax thinkers
approach the matter with no
thought of politics. They contend
that when the size of our debt and
the immense problems of carrying
it without begging down are con-
sidered it is criminal to mix taxes
with politics. To do so is to en-
hance greatly danger of a collapse
of the whole Federal financial
structure. To swing a debt of more
than 300 billions is the greatest
peacetime task any nation ever
faced.
I0-Year Program Urged.
What this group urges is a 10
year tax program which will let
everybody know what to expect.
The first feature Of this plan is
this-no tax reduction of any kind
for the first year after the war.
With the ten-year pros
perity argued as inevitable, exist
ing tax rates for the first year will
produce revenues in excess of ex-
penditures, sufficiently not only to
meet the rush of millions of small
War Bond holders to redeem, but
to reduce the actual debt by from
IS to 20 billion. Beginning the
second year, the plan is to reduce
excess. profits taxes by Is to &c
per cent and reduce rates on the
lowest brackets to some extent
From then on for eight years the
reduction would be by degrees each
year on all brackets.
This is urged as the intelligent
way of dealing with the tax prob
lens. Such plan will not only
give the Government plenty Of
ready cash to redeem all bonds
presented, but to cut down the
debt itself by more than one hun.
dred billion dollars in ten years.
Thus the budget could really be
balanced and complete control ovel
Federal finances regained. If ther,
is any other way to regain contro
of our runaway finances, it has no
been suggested. Senator George.
plan is in that direction but hardly
goes far enough. The congressional
plan is in the other direction. Thos,
now clamoring for a 1916 reduction
on corporation, individual and ex
else taxes sweep aside realities an,
are monkeying with very explo
sive situation.
In the end, the whole busines
will be up to Mr.. Truman. Eithe
he will acquiesce in the politica