Evening star., 1947-12-23
Tax Cuts, Marshall Plan
Clash Sure in Conoress
u. S. Will Go More Deeply in Debt
If Both Proposals Are Adopted
Tie Political Min

u. S. Will Go More Deeply in Debt
If Both Proposals Are Adopted
By Gould Lincoln -:
\ Tax reduction and the Marshall plan for
European recovery mix about Is well as oil and
water. The for-year program under the Mar
shall plan calls for an expenditure Of $l7,0o0..
100000, with $500. 100000 to cover the hrst
Is months. The latest Republican tax bill,
offered by Chairman Knutson Of the House
Ways and Means Committee, proposes to lop
$500 ,ooo,o 900 from Government revenues.
The estimated annual Federal tax receipts
are-under the present tax laws-in the neigh
borhood of $4,000, 900 900. Subtracting the tax
reductions provided In the Knutson bill, 49,.
400, ,o0o. 900 would be left to carry on all Gov.
ernment operations and to pay interest and
principal on the huge national debt. Also, out
Of this residue would have to come the money
for the European Recovery Program.
The Truman administration is pressing hard
for the Marshall plan. The Republicans in
Congress are demanding tax reduction. The
probable result of this conflict will be reduced
expenditure for the t,rst year Of the Marshall
program and . tax reduction bill less drastic
than that offered by Knutson. After ALL .
very large number Of the American people be.
neve they are entitled to some relief In the
war taxs they are now paying. While Mr.. Tru-
man vetoed two Republican tax bills during
the first session Of the 80th Congress, 1t would
be wisdom on his part to 60 along with some
tax reduction In the coming year. He win
have an opportunity to state anew his stand
on taxes In his annual message on the state
Of the Union, when the new congressional
session opens, or In his annual budget message.
Many PEOPLE Worried. -.
The Republicans came into ooOtrol Of Con-
gress by the elections Of 1946, promising TO
bring about reduction In the tax burden. They
tried hard-but President Truman was able to
muster q sufficient number Of votes on Capitol
Hill to have his two vetoes Of these measures
sustained His argument was that 1t was no
time to reduce revenues that the unsettled
conditions Of the world and the need for aid
to other nations made it dangerous.
The psychology of . reduction in taxes Tor
the American people could well have an I'M
portant bearing on their willingness to make
the huge contributions asked Of them for Euro
pean relief and recovery. Between high prices
and high taxes, large numbers Of the people are
distinctly worried.
The Presidents expenditures budget, pre-
sented to Congress last January, WAS $S7, 800.
600, 1000 for the fiscal year la4s. Despite the
desperate efforts made by the Republicans In
Congress to reduce Government expenditures,
tho appropriations made by Congress, tnclud-
ing the recent emergency aid for Europe, are
now close to $36 0oo, 900 900. Obviously, II the
Republican tax reduction proposals and the
Presidents European aid program are both
adopted by Congress, the United States wiz 30
further into debt by two or three billion dol
lars. It IS not . happy picture.
Would Play Into Red Hands.
To back down on the European recovery pro-
gram entirely would be playing right into the
hands Of Soviet Russia most unwise step.
Further, it would give Western Europe q dis
tinct impression that 1t could not rely on
the United States-and so drive 1t into
the arms Of the Communists With national
election coming up next November however.
members Of Congress will be reluctant to deny
the American tax payers . bit Of relief.
A further argument for reduction Of both
taxes and government expenditures hes In the
fact that no country-not even the wealthy
United States, can continue for long to levy
such huge taxes on its people and servics
The estimated national income-of al the
peoples about $500 600, 900, 900. higher than
ever before in history by many billions Of
dollars. With federal taxes taking $46,000.-
OUU,uUO ana STATE ana local taxes auoCner
$11,000, 900 900 out Of this national income, .
dangerous and discouraging situation Is Gre
ated. Almost 80 percent Of the national in
come goes for taxes. Exports on public finance
have for years assumed that no nation could
long endure and remain prosperous and free.
with taxes as high as rs percent Of the national
income.
Should there be falling OF in the national
inconoo NJ hs IIritad Qfatos-and IL NAV n0yne
and expenditures continue at the present
high rate, it Is easy to see that the tax burden
would grow to be 40 to 80 percent Of the
national income. It u time for both curtail-
ment of expenditures and tax reduction.