Evening star., 1946-11-29

r.
reduction must Frank r. Kent.
come first; that to rush in and
slice taxes right of the bat would
be highly irresponsible Federal
finance, almost certain TO invite
disaster.
Such Is the emphatic view, too, of
most of the really competent econo-
rnists in the country, notable among
whom is Mr.. B. M. Baruch, who
right after the war in vain eau
toned his own party against tax
reduction which increased infia-
tionary pressure, pointing out that
the safe and sensible thing was to
balance the budget and reduce the
debt in q period of prosperity when
people had the money to pay taxes
and no hardship was imposed.
What Chamber Urges.
Nevertheless, here is the Chamber
of Commerce urging not a 20 per
cent reduction in the individual in
come tax but Is per cent reduc-
ton. In addition, 1t calls for further
reductions In corporation taxes, In
the estate and gift taxes, in the
capital gains tax, of all war excise
taxes, of the tax on property trans
portation and levies of the "nui-
sance" type, and the elimination of
double taxation" on corporation
earnings and dividends.
In brief, here Is one of the great
business organizations of the Ma
ton recommending a program OF
tax reduction far greater than any
proposed by the practical politicians
"A program that will add to the
dangers of imitation and make all
talk of balancing the budget and
reducing the debt hollow and hypo-
critical. The estimate is that the
Chamber Of Commerce reductions
would curtail the Federal revenue
approximately two billion dollars
Had such a proposition been made
by the politicians, one would expect
businessmen everywhere to howl
that they were about to ruin the
country, to denounce the idea as
purely political and grid their loins
to oppose its passage.
And one would have expected the
loudest howl and the strongest de-
nunciation to come from the Cham
ber of Commerce. That the Cham
ber of Commerce should sponsor
and promote so drastic a cut in tax
revenue is well calculated to leave
the average man aghast. 1t is true
the chamber refers to balanced
budget as vital, but it makes no pre-
tense OF knowing how balance can
be achieved after q tWo-billion cut
in revenue. Tt ignores almost COM
pletely the necessity of reducing the
debt and also the fact that every
Informed man in both parties knows
that the task Of curtailing Federal
expenditures SO as to make income
equal outgo is tremendous even with
revenue rolling in at present tax
rates.
Result of 1945 Action.
Looking back now, nearly. every
competent person agrees that not
only the Federal Treasury but the
national economy as q whole would
be vastly more wholesome II the
ls45 tax reductions had not been
made. Then, for political reasons,
some 100000 taxpayers in the
lowest brackets we're rendered
exempt altogether and the excess
profits tax was repealed altogether.
If that had not been done, the
budget would now be in balance
and start ON debt reduction would
have been made. Then an orderly
and gradual reduction IN tax rates
would have been easy.
Now, If there Is to be an approx
nation Of balanced budget, which
the Chamber of Commerce says is
vital, even the 20 per cent reduction
proposed by the House Republicans
is clearly unwise. But a reduction
all along the line to the extent of
$4,000, ,00O, 600 is worse than that.
To have that proposal come from
the United States Chamber of Com
merce seems incredible. That Is the
last source one would have sus-
pected It used to be the New Dealers
who thought balanced budgets un-
healthy and the size of the national
debt unimportant because I'VE owe
it to ourselves"
This Chamber Of Commerce pro-