Evening star., 1948-03-01
World Situation
Cited as Bar 10
Big Tax Slash
Budget Director Tells
Senators He Sees Little
Hope of Spending Cut
By the Associ,fed Pres.

Budget Director James Z.
Webb today urged that Congress
look at the hard facts of inter-
national life" when deciding
about cutting income taxes.
Those hard facts" he said, do not
give much hope for big cuts in
Government spending in the next
two years.
Mr. Webb testified before the
Senate Finance Committee which Is
considering the House-passed bill to
cut income taxes $6,500, 100000 this
year.
Before Mr., Webb took the COM
mittee's witness chair, Secretary Of
the Treasury Snyder shad stfay op-
posed the House bill.
Mr.. Snyder said that instead Of
passing it, Congress should adopt
President Trumans plan for a $40
cost of living tax credit for every
one.
Optimism Not Justified.
Mr.. Webb said:
Present indications are that this
Nation will face uncertain world
conditions for an extended period.
Practically everything we do to
meet these conditions will cost
money and be reflected in the
budget. = -
Unless world conditions change
draStically for the better, the Fed
eral budget in 1850 will undoubtedly
be large. The fact cannot be
ignored in any consideration of
legislation on taxes"
I'VE Americans always have been
optimistic. The hard facts of in
ternational life do not, in my
opinion, justify the degree of optim-
ism which would make it possible
to forecast 1850 budget materially
lower than that for (fiscaD 1949."
Called Fairer to. All.
Mr.. Snyder said Mr.. Trumans
plan for a $40 credit to each tax
payer and his dependents is fairer
to every one and would mean no
money lost to the Government be-
cause higher taxes on corporations
would make up the difference.
| The House bill would cut taxes
from 30 per cent on the lowest in
come people to 10 per cent on the
highest, with no offsetting business
levy.
Terming the Presidents plan
cost of living adjustment" Mr..
Snyder told the committee I'VE can
not go beyond" that "at this time. "
!, He added:
Premature weakening of our rev.
enue system will involve serious con-
sequences both for our domestic
prosperity and for the peace of the
world"
The Treasury chief did not appear
in person. His prepared testimony
was submitted to the committee at
the start of its hearings.
The Senate group appears likely
to recommend a $4,000, 100000 cut.
Chairman Millikin already has
said the Truman plan has no
chance in Congress.
1 Two Bills Compared.
Referring throughout his state
ment to the House bill by its num-
ber-H. r. 4790-the Snyder state
ment said:
H. r. 4790 would exempt $500, 900
from income taxation in comparison
with the 10,300,000 exempted under
the Presidents program. I.
Moreover. 100000 additional
taxpayers with the lowest incomes
would receive more tax reduction
under the Presidents program than
under H. r. 4790.
These are the groups most urg-
emily in need of relief from the
high cost of living.
/ Under the Presidents program.
SO per cent of the income tax re-
duction would go to individuals
with net income under 5000. This
compares with 66.3 per cent under
H. r. 479o."
; If the Republican bill becomes
law, Mr. Snyder said, this Govern
(See TAXES Page A-60