Evening star., 1948-01-16
Snyder Says Truman Will Veto
Any Income Tax Cut That Fails
To Boost OtherFederaIRevenue
AssuiIs Knutson
Plan; President S
CuIled 'Fuirest'

Secretary of the Treasury
Snyder today virtually promised
the Republican-controlled Con-
gress that President Truman
will veto any attempt to reduce
income taxes without boosting
other Federal revenues.
He laid what looked like an ad-
ministration ultimatum before the
House Ways and Means Committee
whose COP majority is bent on
passing a tax-cutting measure
quickly. The first witness at the
committees tax hearings, Mr.
Snyder declared:
1.-The revenue loss resulting from
any tax adjustments should be off,
set by upward revisions in other
taxes. There must be no reduction
in aggregate revenue"
Backs Truman's Plan.
Mr.. Snyder safu the Presidents
own plan of a $40 income tax cut
for each taxpayer and dependent
matched by 8 new S., 200 900 900 bite
of corporation profits which exceed
prewar average, would fill the
bill.
But he declared a measure by
Chairman Knutson of the Ways
and Means Committee, to cut in
come taxes without making up the
loss elsewhere. would wipe out part
of this years budget surplus and
create $4,000, ,00G 900 deficit in the
1949 fiscal period starting July /.
Furthermore, Secretary Snyder
declared, the Knutson bill would
cost the Government $4,000, 600, ,000
a year instead of the $500, 600, ,000
estimated by the Minnesotan.
THE cold facts are" Mr.. Snyder
said, that present economic condi-
tions, budgetary considerations, in
f1ationary pressures and debt man.
agement problems require the
maintenance of Government reve-
nues at present levels"
Criticizes Knutson Bill.
Mr.. Snyder stopped short of calling
President Truman's plan the only
one the administration will accept
But he called it the "fairest" and
''most equitable" way of making a
"cost- Living tax adjustment" to
ease the hardship of price increases
on families with low incomes.
He said the Republican-faVored
Knutson bill would do less for the
poorer taxpayer and above all 1t
would cause critical loss Of Gov
ernmsnt revenue.
Republicans have declared the
Presidents plan dead as mack
erel.s
Views on Three Points.
Mr.. Snyder blasted at the Knut-
son bill point by point. He gave
the administration view on three
important parts of that measure
as follows:
|. Extension to all States of the
community property principle, now
effective in only II States, whereby
married couples obtain lower tax
rates: This should be given a high
priority" among tax revisionS later
on. 1t should not be adopted now
because it would mean, Govern
nent revenue loss of $803, SOC, 900, OF
which 975 per cent would go to
those with incomes above 5000.
2. Increasing the personal exemp-
ton from $500 to $600-the $500
exemption is ''too low" by far and
the $100 boost is Inadequate" fol-
present high living costs. The
Presidents $40 tax credit would dc
more for lowest income groups.
8. Percentage cuts in the tax rate
--as soon as inf1ationary forces have
been checked "it will be proper to
fit rate reductions into well bal
anced tax revision program designed
to maintain incentives and broad
consumer markets" But tax relief
now should be concentrated at the
bottom Of the income scale" and
the Presidents plan does it best.
As soon as Mr.. Snyder completed
his prepared testimony, he found
himself engaged in verbal fencing
&c. T vITC noro Adl