Evening star., 1947-06-09

necessary factor of confidence which
might have been helpful in keeping
the current recession to mild limits.
With the feeling that the Presl-
dent has turned to the "left," bust
nessmen will have their plans upset
and they will not be able to count
on anything but political turmoil
from now until the November, l948,
elections are over.
Mr.. Truman will have disregarded
the logic of politics and the indl-
Gators which sent his popularity
curve up after the November cleo
tions. For a veto of the tax bill
will mean that the President has
no regard for the wishes of the
48,00O, 900 taxpayers and intends to
keep on spending and spending and
taxing and taxing.
Foreign Policy Seen Affected.
The most dangerous element in
the situation is what may happen
to the bipartisan program of foreign
policy. 1t will be difficult for Sena-
tor Vandenberg to keep the Republi-
can Party in line if Mr.. Truman
asks for more billions for pump
printing" outside the United States
and ignores the tax burdens inside
the United States when there is
surplus.
The new tax rates would not mean
lower revenues. Every bit of expert
ence shows that under lower tax
rates and good business conditions
the revenues increase. Even the
estimated dimunition of $4,000, ,000,-
900 in revenues based on the pro-
posed rates cannot be relied upon
to emerge as loss 1t could stimu-
late investment and business volume
and purchases so that the tax re-
ceipts might go higher and the So
called loss be erased in large part.
In the 1920s when tax rates were
reduced, tax receipts increased
materially.
There is no sign that Mr.. Truman
has made up his own mind in ad-
vance. He has waited for all the
written reports from his associates
and it is at the last minute, after
reading all the suggestions obtain
able from his official family, that a
decision will be reached.
The decision may be based on
line of reasoning that is not clear
as yet but will be as the political
campaign for 1948 unfolds. Mr..
Truman is impressed with the argu-
ment that if slump develops in
1o47, he will need all the artificial
devices he can muster to get
recovery boom swinging in the
summer of 1948 so as to be of help
to him in the autumn elections.
If tax reduction is frustrated now
and the total amount of the surplus
is applied to debt reduction, Mr.
Truman will say he cut, down the
public debt and aided in maintain
ing sound fiscal position. But he
will not be able to claim credit for
the cutting of the budget which he
and his official family are doing
everything in their power to thwart
Might Propose Tax Bill in '48.
BY l948, however the Presidents
supporters think he can propose a
tax-reduction bill that may pass in
February or March next to take
effect as of January l. 1913 The
taxpayers presumably will feel the
effects of the tax reduction and
thank Mr.. Truman. The Repub-
lican majority will help pass such
a tax bill, but Mr.. Truman may be
surprised to find that he can get
1t only by approving bill that
contains a provision to give the
taxpayers as a refund a portion of
what they were denied in 1947 by
the Truman veto.
Likewise, Mr.. Truman may find
some of the administrative provi-
sions of the tax laws amended far
more than the Treasury desires
Certainly a veto of the tax bill
which will be sustained in Congress
because the Democrats as a party
are taking stand against tax re-
duction-would mean the beginning
OF rather bitter partisan fight.
Two Vetoes of the acts of the
Republican Congress certainly will
not be called cooperation" with
the majority in Congress or with
the sentiment of the electorate as
expressed last November. But that
is what the Democrats on Capitol
Hill close to the White House say
is coming in few days.
Political logic points to a sigma
ture of the tax bill and veto of the
labor bill but Mr.. Truman has been
TWO laps behind logic of all KINDS
ever since VI Day. A President
who has urged wage increases with
out corresponding increases in pro-
ductlon and without raise in
prices to absorb the costs is certain
ly not devoted follower of either
political or economic logic.
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