Evening star., 1949-01-23

said that the Government expects
to end the present fiscal year with
a deficit of 100000, 900 as compared
with a large surplus in July, 194s.
The administration has been tradi-
tionally bad guesser when it came
to estimating revenue, however, and
it may be wrong again. Earlier 1t
had estimated that the deficit would
be a billion and a half dollars.
Mr.. Truman puts the blame for
the expected deficit on the Repub-
lican Both Congress, which passed
the tax-reduction bill Of 194s over
his veto. This measure relieved the
income taxpayers of a $4,000, ,000, 900
tax burden. The President con.
stantly referred to the measure as
the rich mans tax BILL" denounc-
ing it. However, very large numbers
of Democrats in both the Senate
and House joined with the Repub-
licans to pass the bill over his veto.
Further, the measure, by raising
personal exemptions. took about
100000 taxpayers in the lowest
bracket off the income tax rolls
entirely.
Notwithstanding all his criticism
of the Republican tax reduction
act, Mr.. Truman has never sug-
gested its repeal. What he is seek
ing now is an increase of income
taxes on the great mass of middle
bracket income taxpayers. If there
is to be an increase in income taxes
they are the men and women who
will bear the burden. The remain-
der of the burden will fall on busi-
ness-and on the holders of securi-
ties, who are no small number.
No Reductions Suggested
Had it not been for the Repub-
licans there would have been no
tax reduction at all in 194S, and
the old higher taxes would still be
imposed-and 100000 persons now
exempt would still be subject to an
income tax. With Mr.. Truman's
program coming up-and all the in
creased spending 1T might have
been difficult to get tax reduce
ton measure enacted even now. So
perhaps the taxpayers, even the
small ones, have something to thank
the 80th Congress for
The higher exemptions contained
in the Republican tax law account
ed for AZ per cent Of the revenue
loss, which totaled $4,000, ,000, 900.
Also a married couple with two
children and $500 income had
their income tax reduced under that
law from sos to $16.60-a material
reduction, 50 per cent. A similar
family with $4,000 income received
tax reduction from $190 to $9960,
Al per cent cut, and another with
$4,000, a reduction from $3.50 to
$265 so, a 80 per cent cut.
So far Mr.. Truman has suggested
no reduction in taxes-especially in
come taxes-but only an increase
in taxes. If he has any plans for
lessening taxes he has still to re-
veal them. His program, however,
looks only to an increase Of Gov
ernment expenditures.
Under his proposals for social Sc.
curity expansion and medical serv-
ice, the benefits would lie in in
creased old-age pensions, increased
unemployment insurance and in the
payment of doctors bills-in part
at least-by the Government. But
it would make the maximum social
security tax now paid by worker
s144 a year instead of $30-and it
would be taken out of his pay en-.
velope Not only would the social
security tax rate be increased, but
the first $4,000 of pay would be
subject to the tax, instead Of the
first $1,000.
Republicans Not Committed
Ii the Presidents budget-s41 ,soo,.
000, ,O00-is carried out and there Is
no deficit spending, every cent will
come from direct and hidden taxes,
taken from the people and business
concerns all over the country.
Should the new programs, con-
tanned in the Presidents recon-
mendations to Congress, be enacted
into law, the appropriations by Con-
gress and presumably the expendi-
lures will be still further increased.
In each State Federal taxes will
exceed the total amount of taxes
collected to operate the State gov.
ernment and all its municipalities,
counties and school districts COM
bined. Representative Reed of New
York, ranking Republican member
of the House Ways and Means Com
mittee, has estimated the proper.
tionate share of the Federal tax
to meet the Presidents budget
which will be borne by the taxpay-
ers of each State New York heads
the list with 15.48 per cent, or S.
486, 10000. Next in order is CALI
fornia, with 1882 per cent of the
total tax burden. or $3,486, ,080, 900.
Then come Illinois, Pennsylvania,
Ohio, Texas, New Jersey. These
figures do not include the proposed
new social security taxes.
Republican leaders in Congress
have not committed themselves yet
to any particular position on tax
revision. One of the most promi-
nent, however, ventured the predic-
ton that proposed increases, par
ticularly on personal incomes, would
be opposed almost to man by the
Republicans - unless it could be
shown that national defense needs