Evening star., 1948-04-05
Power 10 Tax Is Seen
! Returned 10 Congress
Overriding Of Veto
Vote by Legislators Held
9 Reputation Of Trumon
By Spokesman Of People
By Dapid Laurence

By Spokesman Of People
By David Laurence
Control Of the taxing power Is
back in the hands of Congress,
where 1t belongs.
Abuse Of the presidential veto to
compel . two.thirds vote before the
people can get changes In their tar
rates has resulted In q humiliatina
defeat for President Truman.
Taking his cue from President
Roosevelt, who vetoed . tax bill for
the first time in history veto
which, incidentally, was overridden,
too-Mr. Truman twice prevented
the National Legislature from fixing
tax rates.
Now hy Q substantial majority
well over two-thirdsA Congress has
taken back into its own hands the
hxing Of tax rates.
It might be said that Congress
can be prevented again from max
ing new tax laws. But 1t Is . far
different thing to enact . new law
now than 1t has been heretofore
when q minority Of Congress, sup
porting q presidential veto, could
keep existing high rates in effect
indefinitely.
Lesdership Questioned.
When SO many members Of
President Truman's own party in
both the House and Senate desert
him to vote for tax changes, 1t Is
q sign that the Chief Executive has
adopted stubborn position which
makes his leadership Of the party
more theoretical than real.
In this campaign year the Demo-
Gratis who voted to override the
veto must 80 before the people say
ing, In effect, that the President
was wrong in his attitude.
The arguments made in the first
two veto messages are much the
same as in the one sent to Congress
last week. Mr.. Truman says that
tax reduction is not possible because
Of huge expenses abroad or because
surpluses must be used for debt re-
tirement. What he is contending,
In reality, is that the American
people must operate indefinitely
under wartime tax rates.
MIR. Truman uses the same dema-
gogic line he has employed before
namely, that 40 per cent of the tax
reduction goes to people who earn
more than 5000 q year. Does he
mean that tax policy must be based
on some form Of communistic share.
the-income doctrine such as has
undermined democracy abroad and
weakened 80 many countries?
High Prices Laid to Government.
BY overriding the veto, the legis-
lators have responded to public
opinion. To the argument that tax
reduction will produce imitation by
increasing the purchasing power of
millions in the low-income brackets,
there is simple answer. It is that
the huge expenditures by Govern
ment, which create new demands
for goods, are sending prices upward
in an infiationary cycle and the
low-income groups need the pur-
chasing power to maintain q decent
standard Of living.
Mr.. Truman endeavored to rebut
the contention that investors would
be helped and thus business would
benefit by the inflow of more risk
capital II taxes were reduced. He
said business profits were high and
funds had been available in adequate
quantity. But he failed 10 distin.
guiSh between borrowed money with
ffxed obligations sl1d interest and
the lack Of equity money such rs
has built up American industrial
power.
II the tax structure had not been
changed this year. the whole eco
nomic structure would have been
weakened.
Mr.. Truman limited twice before
ut the possibility OF a crisis over
seas and now he does not have to
hint. because the situation with
Russia is plain. But Congress
understands that, too, and has come
to the conclusion that If war
breaks out higher tax rates can be
enacted overnight. The American
people will gladly pay wartime tax
rates during q war. What they
object to is the arbitrary attitude
Of President who says, in effect,
that wartime tax rates must con.
tinue for decades to come. II his
reasoning is accepted, there can
never be any tax reduction while
there is . huge public debt, and
obviously the public debt will not
be reduced materially for so years. |
,e Obstruction Is Seen.
Mr.. Truman has failed to apply
. reasonable policy either to debt
retirement or tax reduction and,
after having been opposed twice byl
majority Of Congress, he has en-
deavored a third time to maintain
his policy of obstruction.
There may be q deficit instead Of
. surplus If war-emergency spend
ing grows, but there is also the
chance that the very armament
spending may swell tax receipts at
the new rates to levels never be-
fore reached, so that the estimated
loss of revenues will not material
ize at all.
In any event. Congress viii meet
the fiscal situation as 1t arises and
1t will take only q majority vote
to enact higher tax rates II they
become necessary. Tax legislation
should be left to a congressional
majority, which, irrespective Of
party, usually reflects the will OF
the people. In q parliamentary
system of government, Mr.. Truman
would now be out of ofiice as he has
been repudiated on q measure of
prime Importance by more than a
two-thirds majority.
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