Evening star., 1947-11-13
Plan 10 Reduce Taxes
By 6 Billion in 1948
Given House Experts

Chairman KnutSon of the
House Ways and Means Com
mittee today turned over to COM
mittee consultants a plan to cut
the Nations tax load by s6,000,-
100000 in 1948, but declared he
still plans to press for passage
of his own $4,000,000 900 reduc-
ton plan at the regular session
Of Congress.
The 100000 900 proposal. offered
by the Committee for Economic
Development, pointed out the reduc-
ton could be effected without
jeopardizing foreign aid or payments
on the national debt. 1t further
urged a stabilized budget for the
1S50s, producing about SIS, 200, 900 900
a year less than the present tax
structure.
Yesterday, Mr.. Knutson called on
Senator Taft. Republican, of Ohio
and reported the Senator agreed
with House Speaker Martin that
tax legislation should be carried over
to January instead of being pre-
sented at the special session open
ing Monday.
II am in full accord Mr.. Knut-
son said.
Long Range Plans.
The Economic Committee proposal
for the 1950s are based on the as
sumption war influences on the
budget would be ended.
The recommendations are con-
tanned in report by the committee
entitled Taxes and the Budget: A
Program for Prosperity in a Free
Economy" 1t was released last night
by Paul C. Hoffman. president OF the
Studebaker Corp. and CED chair
man, and Raymond Rubicam,
chairman of the CED Research and
Policy Committee.
Most of the report is devoted to
long-range budget recommendations
based on annual cash expenditures
of $4,000 100000 in the 1950s, with
an assumed national income of
s220,O00,000 900.
NCtoVu Sut.
The tax cut of s6,000000, 900 the
CED recommends for 1948 is half
again as great as the tax cut bills
vetoed by President Truman last
spring. Even with this cut, the
report asserts. the expenditure of
$4,000, 100000 for foreign aid to be
financed, by taxation would be al
lowed and there would be a s3,000,-
100000 surplus.
The American economy needs
tax reduction in the near future"
the report states. But it says it is
neither necessary nor desirable to
make final decisions about l94S tax
policy at this time.
The CED warns that I'VE should
have a clearer picture than We have
now as to probable expenditures in
calendar 1948 and should have evil
dence that inf1ationary pressures
have begun to diminish
Actual unemployment" the re-
port states elsewhere, may from
time to time lie below 4 per cent;
it cannct be much below this
figure without serious inf1ationary
pressure.
The Census Bureaus employment
figure for the week of October sill
was SO 9,204, 900, with unemployed at
1887 900. or about 3 per cent of the
total labor force.
Without prediction or advocacy
the report says of prices:
1T seems reasonable to say that
some decline from the present price
level is possible without signifl-
cant increase in unemployment.
Some narrowing of profit margins
in many sectors and some decline
IN prices of farm products probably
would not entail any substantial
reduction of output. However, there
are also some prices-notably rents
that must rise before balanced
price relations are achieved"
Would Provide Surplus.
The key to the stabiliZing budget
policy, the CED says, is to set tax
rates to balance the budget and
produce q surplus for debt retire
ment at an agreed high level of
employment and national income.
Then leave the rates alone unless
some major change confronts the
Nation.
The committee sees this method
generally as device which will
dampen the swings between inf1a-
ton and depression. AS the economy
expands, more would be taken from
the taxpayer and as it contracts, less
would be taken without any f1uctua-
ton in the tax rate.
The objective for the 1950s is
$4,000, 900. 900 for expenditures and
$4,000, 100000 for surplus