The Daily Alaska empire., 1947-04-24
TAX ISSUE
 EXPLAINED
 BY HAYNES
Declares Reduction Feasi- bIe = Also Reduction
 of Public Debt

WASHINGTON, April 24-tR- John w. Hanes, former Undersecre- tary of the Treasury, said today the nation could have both tax reduction and debt reduction if Congress proceeds with it's present plan" of slashing President Tru- mans 1948 budget.
 He urged, in statement to the Senate Finance Committee, that the income tax reduction bill al- ready passed by the House be en- acted speedily.
 Hanes was one of the first ad- vocates of an income tax cut invit- ed to testify before the commit tee which has devoted two days to hearing government officials criticize the bill.
 Hanes told the committee:
 The general feeling that the (FederaD debt must be reduced during this period of prosperous business is most wholesome. I heartily agree. But to attempt to pay off the debt without relieving the taxpayer of at least a part of his excessive burden is wrong. It will defeat the very purpose we are trying to achieve"
 Startling Prediction
 Hanes startled Capital tax ex- perts April 9 when he predicted in a letter to the Finance Committee that the government would find itself with surplus of S3000,000,- coo to $4,O0O, 100000 at the close of the current fiscal year.
 He referred to his estimates to- day and noted they varied sharply from official estimates. He re- called that in January the Pres ident predicted a $2,300, 100000 de- ficit by June 30; that Secretary of the Treasury Snyder was equal ly pessimistic, but has gradually upped his figures" and on Tues day conceded" that a surplus of $1 ,250. 0.000,000 was in prospect"
 Arguing that the tax cut provid- ed in the House bill will not be inflationary, Hanes said:
 Tt is true that people will have more to spend if their taxes are cut: On the other hand, the gov ernment will have less to spend by the same amount People will be spending their own money, for a change, instead of having the government spent it for them. .
 Endorsing proposed reductions in the bill-ranging from 10 to 30 percent-Hanes said the measure should be considered as one pro- viding needed relief but not as permanent revenue bill which could be worked out in a thorough going revision of our entire tax system"
 In his April 9 letter Hanes de- clared that if Congress went through with contemplated spend- ing cuts, the Treasury would take in from $9,500,O000O to $l1,0O0,- C00,00O more than it would spend in the 18-month period ending on, June 30, 1948.
 The House has approved a $6,- 0C0 100000 cut in President Tru- mans ,500,0OO,OO0 budget esti- mates, the Senate a $4,500,000 900 reduction. The two branches have not yet agreed on a common figure.
 Secretary of the Treasury Shy der, in testimony yesterday and Tuesday, stood pat on his assertion that no tax cut should be made this year, but that any surplus should be applied against the pub lie debt.
 w. T. Sherwood, assistant Com missioner of Internal Revenue, told the Committee late yesterday that some of the features of the House bill would be hard to administer. He also asked that Congress allow at least 60 days between enactment and the effective date of any tax reduction to permit distribution of revised withholding tax instruc- tionS.