Evening star., 1950-01-24
Truman Tax MESSAGE
Declared ENCOURAGING
To American Business
Punitive Approach Held
Lacking for First Time
In Nearly Two Decades
By David Laurence

By David Laurence
For the first time in nearly two
decades a tax message from the
President of the United States
has come to Congress without an
attempt to use the taxing power
as means of accomplishing social
or theological reforms.
This significant change in ap-
proach is more important than
the actual recommendations made
by President Truman. For it is
the first real word of encourage
ment about tax policy that Ameri-
can business has received in q
long, long time.
1t is important to record, more
over, that the White House doesn't
intend to prescribe tax rates as
in the past but has decided to
leave the whole matter to the
Congress. The tax bill this year
will be written in the House Ways
and Means Committee and the
Senate Finance Committee, as
used to be the custom before
1888.
Knows Congress Temper.
Perhaps the change is due to
President Truman's familiarity
VIII the temper of Congress when
tc tie President Roosevelt in
1914 sent back tax bill with his
veto and Alben Barkley, then ma
jority leader. joined with two
thirds Of both houses to override
1t.
Congress is in a better posi-
.tion to write a tax bill than is
the executive branch of the Gov
ernment, anyway. The adjust
ment OF tax rates is close to the
people. 1t has a bearing on votes
at the polls, of which every mem
Der is conscious.
, But there is something more
important than the negative vir-
tue of emitting the punitive ap-
proach. 1t is the rather positive
or Affirmative championship by
MIR. Truman Of the viewpoint that
tax receipts can be stimulated by
tax rates that are productive and
not too burdensome. This was
the very factor that caused the
treasury. to collect taxes in the
'20's in such volume that a sur
plus was achieved year after year.
Mr.. Truman's exact words on
the relationship of taxation to
business growth are worth careful
examination:
Government revenue policies
are as important in our economy
as Government expenditure pol
a1cies. Events of the last few years
have proved that our economy can
grow and prosper, and that en-
ployment, production and incomes
can increase, at the same time
that individuals and businesses
are paying taxes which are high
by preWaF standards. However.
taxes can and do have an impor-
tar1t effect upon business condi-
dt1ons and economic activity. It
should be our constant objective
to improve our tax system so that
the required revenues can be OBJ
tanned without impairing the pri-
-vate initiative and enterprise es-
sential to continued economic
growth" ... ......-,
Back Of New Approach.
No conservative could have ex-
pressed it any more clearly. It.
might be asked what is back of
this new approach. The answer
lis that the administration Is dis
inclined to make drastic curtail-
-ments in expenditure for fear of
a business decline and believes
that, If business is not hampered
or harassed by changes in the tax
laws. the tax receipts might grow
to the point of bringing the
budget into balance in a year or
two.
MIR. Truman did not even spec
:ify how high the increase in COR
poration tax rates should 60. He
simply recommended "a moderate
increase" He wants Congress to
decide how many percentage
points above SO should be imposed
on corporations.
: 1t is q conspicuous example of
passing the buck-but that's what
always used to happen under Re
publican as well as Democratic
administrations in the days when
the Chief Executive respected the
powers Of Congress and trusted
the legislative branch to originate
tax legislation. The veto can, of
course, be applied by the Presi-
-dent to restrain any extreme steps
and yet the responsibility for
making the tax laws is carefully
lifted from the list of political
liabilities incurred before another
presidential campaign.
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