Evening star., 1949-10-21
Cut in Spending
Urged Instead
OF Tax Boost
Martin Says Truman
Seeks More Funds for
Socialist Schemes
BY the Associated Press

President Truman's talk of tax
increase with counter proposals
to slash Government spending
instead.
Another popular suggestion on
how to make the Governments
ends meet was:
BY tax adjustments and other
incentives, encourage a billowing
industrial and business economy
with sights set on a $500, 900, ,O0O,-
900 national income. That, it is
figured, would yield adequate rev.
enue-Without increase in tax
rates-to support Federal, State
and local governments. National
income now is at the rate of
about $217.000.000,O00.
House Minority Leader Martin
issued a statement saying the
President wants more taxes to put
his Socialist schemes over on
the American people"
Shaky Economy Mentioned.
The American economy" he
declared. sis so shaky now that
an increase in the tax burden
might easily lead to depression
with millions out of jobs"
Mr.. Truman disclosed his 1850
tax objective at his news con-
ference yesterday, despite the fact
that (A) Congress has ignored
his call last January for a $4,000
100000 tax increase. and (B) 1850
is election year. All House mem
bers and one-third of the Senate
will be out asking votes then from
taxpayers.
Mr.. Truman told the newsmen
that if anybody could tell him
any way, without tax increases,
to meet an estimated s5,OO0,000,-
900 Federal deficit in the current
fiscal year. then he'd like to be
told.
Chairman George of the Sen
ate Finance Committee came up
Immediately with this counter
proposal:
Il think the way to meet our
deficit is: /. To reduce spending,
and 2. Readjust our taxes so as
to encourage greater production
and inspire greater activity in all
lines.
Would Encourage Output.
Il do not see how the national
income can be increased by add
ing to the burden of taxes at this
time. Some taxes should be re-
Ipealed and adjustments made
wherever careful study may in
dicate a readjustment of the tax
burden is needed. In such a re-
adjustment some taxes may be
increased.
Il have strong conviction that
we should encourage increased
production until we achieve an
annual national income of some
where in the neighborhood of
$500, 900 900 900"
The New York stock market
dipped on the news of Mr.. Tru-
mans comments.
Chairman Doughton of the tax
framing House Ways and Means
Committee already had an
nounced his group expects to
tackle a tax revision bill next
year.
TAX increases" he said, should
be considered only after all rea-
sonable efforts have been made to
bring expenditures into line with
revenues under present tax rates."
/. He told reporters the commit
tee will consider any tax plan the
President sends up. He made no
prediction, however, on what it or
Congress might do.
Byrd Backs Cut in Spending.
Senator Byrd, Democrat, of Vir-
ginia. commented that "the Presi-
dent has the cart before the horse
he should call for a drastic re-
duction of expenditures and avoid
any increase of taxes if there's
any way to do it,"
Representative Reed Of New
York, senior Republican on the
Ways and Means Committee, as
serted that many in both parties
feel "the American citizen is en-
titled to a tax reduction rather
than an increase" He predicted
Congress would overwhelmingly
reject a request for higher taxes.
Mr.. Reed charged the situation