Evening star., 1950-01-20
Truman Welfare Aim.
Won't Be Met Unless
Business Thrives
Tax Increase Held Vitul
If Spending Program Is
Not to Be curtuiIed
By David Laurence

The Truman administration
would like to have the business
world believe that it sincerely
wants to help business men make
money.
AS one cabinet officer expressed
1.-THE social welfare programs
and the major items In a present.
day budget are so expensive that
they cannot be met unless bust
ness does make money.
An appreciation of that simple
fact becomes Of transcendent i'm
portance as the President pom
ders the various recommendations
that have been made to him for
the forthcoming message, to be
sent to Congress next week, OF
changes In the tax laws.
The people as a whole. of course
never like increased taxes. It's q
political hazard. The smaller
business men In particular are
pressing hard for repeal or re-
duction of excise taxes which have
become a barrier to increased re-
tail sales of many consumer prod
uets. How to make up the loss OF
revenue from the excise taxes
without imposing somewhere else
new taxes that might discourage
business is the real problem which
the President is trying to solve.
Three Different Plans.
Three different tax plans are
before Mr.. Truman. They have
their advantages and disavan-
tages. In theory. there has been
much support for some new pro-
posals that might be elassed as in-
centive taxation, This, however
involves certain losses in revenue
for the time being-that is. until
the incentives can take effect and
bring In a larger volume of re-
ceipts. 1t is unlikely, therefore
that at this session Of Congress
the administration will press for
incentive plans.
To make up the loss in revenue
from exeises, the principal for
mula before the President Is one
that would increase the rates o1
corporations by a few points. This
is described as moderate. But
even as much as four points in the
percentage scale represents an in
crease of about ene-tenth in the
amount of taxes that would be
collected On every thousand dol
lars earned by corporations.
Can all corporations readily alb
sefb such q tax? viii prices have
to be raised9 Should the smaller
businesses be spared the increase
so that it applies only over o givef
amount? These are the issues pre-
sented as the President attempts
to choose between various tai
plans.
Break for Business Possible.
Entirely apart from tax rates
there's a possibility of break fol-
business and individuals. The
Treasury Department. has. long
recognized the need for ciarifica-
tien of the so-called administra-
tive provisions of existing tax
laws. It is long overdue. In the
sGth Congress, which the Repub-
licaaas controlled. there was a fair
measure ef agreement between
the Treasury's Representatives and
both parties Ia Congress as to
what ought to be done. Many Of
these provisions affect the nature
Of business and personal deduc-
tiens, partnerships among men,
bers Of the same family, interpre-
tatien of gift and estate tax rules
and host Of other items that
could mean a decrease in taxes
for many peeple-if not q saw
ing in the expense of litigation.
1t could happen that the ad-
vantages to be derived from the
changes in the administrative
provisions would be very helpful
to business men and thus wiz
support for the tax bill as q
whole.
But 1t Is to be borne in mine
that, whenever a tax bill 10 epenee
up for amendments. a demagogit
element can bring ia extrems
amendments which can prove
embarrassing for other member
to vote down. A tax law can
not be forecast merely by read
ing a Presidents message thereon
Congress has been impressed
of late with the fact that 1t il
fatal to kill the goose that lay
the golden eggs-and the admin
istration realizes it needs a Who'll,
lot Of golden eggs to maintai,
its spending program and brini
about a balanced budget. Onl.
an increase In tax receipts cal
balance the budget if spending
is not going to be curtailed much
So the Truman administration
looks to business to make NOR,
money and thus help bring il
more and more tax receipts.