The Wilmington morning star., 1947-06-17
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his answer to arguments made
for tax reduction:
1. Despite many gloomy predc-
tons, there is NJ convincing evil
dence that a recession is I'M
The Senate Finance
committee in its report on the
bill had said it would be a hedge
against a recession.
2. There is no shortage of
for necessary invest
ment and business expansion" so
a tax cut is not needed to release
money for that purpose, as many
witnesses commended in hearings.
3. The purchasing power of con-
sumers should be increased by
ironing out the disparity" be-
tween prices and wages through
wise policies and improving prac-
tees of business and labor" cut
ting taxes sis not the proper way"
to do it. Retailers particularly had
urged lower taxes to boost purchas-
ing power.
Only Reference
1t was in this phase of his veto
message to the House that Nj.
Truman made his only reference
to the future tax reduction:
1.-THE time for tax reduction will
come when general inflationary
pressures have ceased and the
structure of prices is on a more
stable basis than nov prevails.
How long it will take for this point
to be reached is impossible to
predict"
Republicans, fully expecting the
veto. charged that the admins
tration wanted to put it off until
the 1948 campaign. year for politi-
cal purposes.
In declaring that Sound fiscal
policy requires that existing tax
rates be maintained for the pres
emit" Mr.. Truman mentioned
heavy obligations growing out of
the war; still to be met, and the
nations greatest responsibilities
for international relief and rehabili-
tation.
His argument that surplus funds
should 30 for debt reduction in
stead of tax reduction ran thus:
"A time Of high employment and
high prices, wages, and profits,
such as the present, calls for sur
plus and the application Of all or
much of this surplus to the reduc-
ton of the public debt. Continuing
public confidence in government fl
nances depends upon such a policy.
If the government does not reduce
the public debt during the most
active and i~nflationary periods,
there is little prospect of material
reduction at any time"
Benefit Argument
His argument that the bill would
benefit the big taxpayers more
than those "in the low income
brackets" was this:
Under H. R. l, tax savings to
the average family with an income
of $500 would be less than $50,
while taxes on an income of $780,
900 would be ruduced by nearly
$4,000, and on an income Of $780,
600 by nearly $50, 900.
Insofar as 'take-home' pay is
concerned under H. r. l, the fami-
ly earning 81, 500 would receive an
increase of only IL percent; the
family with an income of $50, 900
would receive an increase of 1876
percent; and the family with an
income of $780, 900 would receive
an increase Of 62.3 percent"
The President concluded with a
proposal that "a thoroughgoing re-
vision Of the tax system" be plan
ned. On personal income taxes,
ne suggested planning not only for
changing the rate of taxes but the
amount of exemptions and other
factors. And he said I'VE should
also consider changes in excise
tax laws, gift and estate taxes,
(and) corporation taxes" without
specifying whether he thinks these
should be higher or lower.
The House Ways and Means COM
mlttee, which originates tax legis-
laton, already is making a study
81 the whole revenue system with
a view to action next session. In
come tax reduction seems certain
to be brought up again at that
Time, but the Republican leader.
snip does not plan to try to put
through another tax cut bill al
this session.