Evening star., 1948-03-23
Vote on Tax Measure
Reflects Popular
Demand for Relief
Congress Is Seen Acting
On Assumption Thot
War Is Not Near
By David Laurence

Congress, rejecting a popular de-
sire, has brushed aside all partisan
ship and prepared the way for a
reduction in taxes on individual in
comes effective this year.
Whether President Truman We
toes or does not veto the bill, there
are more than two-thirds of each
House who will vote to enact 1t.
The steady, persistent pressure for
tax reduction does not emanate
from any one class Of individuals.
1t is pentup demand for relief
from wartime tax rates. Citizens
are quite willing to bear high taxes
as sacrifice for war objectives, but
in peacetime high tax rates become
form Of punishment for thrift and
talent and creative ability.
Need for Cut Apparent.
The need for tax reduction has
been apparent ever since the war
ended. Congress now is acting on
the assumption that war is not near.
If war comes, tax rates will be lifted
higher overnight.
The principal argument for tax
reduction is the need to protect the
Nation against depression. The
present-day economy Is imperilled
by the fact that individuals do not
have enough money after meeting
expenses to invest in securities. Un-
less risk capital Is available from
private sources, the Government
must furnish 1t. This leads to state
socialism and the destruction of in
dividual liberties, including the
sitting of the private initiative
which has built America.
The radicals, of course, fight every
form Of tax reduction that can
strengthen the present thrift sys-
tenn because they want to demolish
it and substitute state capitalism.
1t Is precisely this trend which the
CIO and other radical organizations
have favored, little realizing that to
destroy the private saving and pri-
vate capital system Is to bring the
chaos from which communism or
fascism usually rises.
President Truman may surprise
the country by signing the new tax
bill. Certainly he would put a lot
OF Democrats out on a limb by
asking them to sustain a veto and
then go before the country against
candidates who favor tax reduction.
When such large number of
nnrn1Rrofc re
litically unwise for the President, as
party leader, to 60 contrary to their
wishes.
Two-Thirds Vote There.
But the two-thirds votes are there
in both houses for enactment over
the veto, and preparations are now
in the works at the Treasury to
handle the tax-reduction program.
If, in the next two or three weeks,
the international situation should
show signs Of growing grave, it
may be that enough Democrats
might change their minds and vote
to sustain veto, but the growing
belief now Is that the crisis in world
affairs will not materially change to
an acute stage in the near future.
The estimates, incidentally, that
have been made as to the amounts
of revenue which will be lost on
account Of downward changes in tax
rates are by no means infallible.
The experience Of the country with
decreased tax rates is that they
stimulate business activity to such
an extent that corporate receipts
and miscellaneous revenues show a
marked improvement. 1t would not
be surprising if, instead of the esti-
mated loss of $4,80O,O00 900 in rev.
enue, the Treasury may actually
lose less than half that amount.
If so, the way will be opened to
further tax reduction.
BY no stretch OF the imagina-
ton, to be sure, can the bill just
passed by the Senate be called a
normal or moderate tax-rate meas
ure. It provides for reduction, but
the rates still will remain far above
what they were in 1899.
So far as political benefit from
the latest reduction in taxes is con-
cerned. so many Democrats have
supported the measure as to make il
virtually bipartisan affair.
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