Evening star., 1947-01-10

paired by Is years of wasteful ant
unsound financial policies that 6
further delay in recovering fisca
sanity easily may be fatal. Ane
Mr.. Knutson's proposal for an i'm.
mediate reduction of 20 per cent ir
taxes does not move in the recovery
direction. Nevertheless, ever since
the November election, he has beer
harping on this 20 per cent reduc-
ton.
II Mr.. Knutson has his way, this
will be the first thing Congress will
do. 1t will come ahead of debt re-
duction, expenditure pairing and
budget balancing. That makes nc
sense from whatever angle it is
viewed. And it is just as unsound
politically as it is economically.
Would Nullify Efforts.
Economically, it not only puts the
cart before the horse but woulo
make it impossible to move the cart
because there would be no way tc
get the horse on its feet. In other
words, anything like a 20 per cent
tax slice will nullify all efforts te
reduce debt, cut expenses and bal
ance the budget.
This Is so clear that there is prac-
tically no room for argument about
1t. It is just matter of addition
and subtraction. The revenue loss
involved in a 20 per cent Cor even a
10 per cent? cut could not possibly
be made up by any possible econ
omies. Thus, there would be
no balanced budget and no debt
reduction. Thus, we would lose
ground financially instead of gain
ing. Thus, we would emerge from
q session in which the total appro-
priations cannot now be foreseen
with less financial stability than
now. And that, considering our con-
cededly tottering fiscal condition
is the road to collapse, all of which
has recently been pointed out
among others, by Senator Byrd
Democrat, Of Virginia, who is the
real authority on the subject in
Congress.
Politically speaking, this 20 pei
cent proposition seems sillier, If pos
sible. than it does economically. Of
course, everybody would like to have
his taxes cut. But only the extremely
short-sighted would want them cut
at the price of increased Treasury
instability. And where would be the
political advantage? The theory is
that everybody would be so grateful
for the tax cut that they would be
sure to vote the Republican ticket
next time.
Well, in the first place, the Demo-
Gratis, unwisely and obviously for
political reasons, last year fore
stalled the Republicans in this tax
cut business by repeating entirely
the excess profits tax, and then ex-
empting some 100000 citizens in
the lowest brackets from all direct
taxes.
Not Factor at Polls.
In the last election did the voters
either in the higher brackets af.
fected by the excess profits repea
or the lower ones affected by the
mass exemption, vote the Demo
cratic ticket to express apprecia
ton? Certainly, the returns did no
show it. In the second place, four
f1fths of the people who pay take!
in the pivotal States vote Repub
lican anyhow.
Failure of the Republicans to re
duce taxes this session hardly woult
induce many Of them to turn to thu
Democratic Party with its left-winl
afiliates and reckless spending poll
cies. It would weaken confidence Il
the Republican Party, destroy it
chances Of making a good record
and gain 1t relatively few votes.
Finally, even though votes are +
be won in this way-and the proc
is against that theory-why do !
this year? The next election is II
November, l948-not 1947-and tina
Is a year and 10 months off.
The sensible thing, of course, |
for the Republicans to concentrat
this session on restoring strength t.
the weakened Federal financial sys
tenn BY cutting expenses and reduc
ing the debt. Then, in 1948, If
seemed expedient, taxes could b