Evening star., 1947-07-03

Wartlm e TAX DaVio h"fehee'
rates for several years after the
war is ended is not easily explained
to the voter. This Is especially true
when the people see the Truman
administration refusing to cooper
ate in cutting the budget and in
sisting on spending policy.
There never has been such resist
ance to budget cutting by bureauc-
racy as has been witnessed this
year. Congress has nevertheless
steadily reduced appropriations and
prevented the spiral OF increases
from continuing, as would have
been the case if no economy drive
had been started in the present
session of Congress.
With the budget in balance for
this year and with an indicated
surplus of several billions of dollars
for the fiscal year ending June 80,
1948, a revision Of individual tax
rates follows logically as sequel
to the reduction in corporation
taxes which was passed by the
Democratic majority in the 4ast
Congress.
Question Of Veto Again.
The House is expected to pass
the new tax bill and the Senate
will do likewise, but the question
Of whether there will be another
veto and whether 1t can be over
ridden arises. There are some
Democrats in both Houses who did
not vote for the tax bill before but
now >will support the measure if
the effective date is deferred until
January 1, 1948.
The important thing for the tax
payers to bear in mind is that, If
the new tax bill is killed, there
probably will not be any revision Of
tax rates until 1949, even If a Re
publican President is elected in
November, 194S. This is because
the administrations arguments
against a tax revision beginning
January /, 194S, If repeated in a
veto, would be readily interpreted
as meaning there will be no ap-
proval by Mr.. Truman Of any tax
revision measure during 1948.
Certainly If the Democrats at
tempt to bring a tax bill forward
in the 1948 session of Congress, it
would be May or June before such
a measure could be enacted. It
would then be difficult, If not i'm
possible, Job of administration, to
make the law retroactive to Janu-
ary /, 1948. The chances are 1t
would take effect on January 1,
1949. The people would, therefore,
not get the benefit of the improved
condition of Government finances
for nearly a year and a half-in fact
not before March Is, 1949, when the
first installment would be paid.
Aid to Every Household.
To know now that taxes would
be reduced for the calendar year
194s would assist every household
budget In the country-for the
proposed tax revision Is straight
across the board and affects the
lowest income groups with 80 per
cent cut, the middle groups with 20
per cent and the highest group
with 10 per cent.
The amount of the proposed tax
reduction is estimated to be well
within the surplus due for the next
fiscal year, even after sizable
amount will have been paid on the
public debt There is no certainty
that the estimated losses in revenue
figured by the experts will materi-
alize. After World War I, the ex-
perience was that the lower the tax
rates, the higher the gross receipts
resulting from improved business
and an increased volume of business
transactions. The Treasury has
consistently been wrong in recent
months in Understanding tax
collections.
The Democrats in the Senate, lee
by Senator Byrd of Virginia, fee
that a tax bill should be passee
when the facts are available on the
1948 fiscal year budget. These should
be ready Soon-certainly before f1nal
action on the new tax bill which is
due later this month.
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