Evening star., 1950-02-04
The Political Mill
Administration Seen Bent
On Federal Tax Increase
Mild Reduction in Excise Levies
Held Out as Sop to Voters
By Gould Lincoln


The administration is not bent on tax
reduction-on the contrary, it is seeking
shift, and at the same time, an increase in
federal taxes. This is clear from the detailed
statement of its tax program, made to the
House Ways and Means Committee by
Secretary of the Treasury Snyder. AS
sop, the Administration holds out a mild
reduction of the wartime excise taxes. These
are taxes which almost five years after the
close Of hostilities are still clamped on
essential services and some essential prod
ucts. They have been described in the past
as luxury" taxes-an admitted misnomer
which was used to justify them at various
times.
The tax program met with a bad reaction
in Congress, from both Democrats and Re-
publicans. It even brought from one high
ranking member who deals with tax legis-
lation, fiat prediction that tax legislation
for this year is probably "out." Even should
there be legislation, which this legislator
does not now expect, it will not be ready
for final action until July, he insists. This
would result in long delay of relief for
services and producers affected by the excise
taxes. 1t would prolong a buyers strike.
too, which has set in already, in the expec-
tatlon OF an early slash in taxes on many
articles. Further, many articles and some
services now taxed, are not included at all
IN the administrators program of reduced
excises. .
Forced to Offer Proposal g.
Almost it looks as though the admins
tration would shed no tears if there were no
tax changes at all. 1t was forced, by a
constant clamor lead by Republicans to
come forward with proposal for wartime
excise tax reductions. But President Truman
has taken the proposed excise tax reductions
as an excuse to ask for other tax increases
in other words, net tax increase of about
$1,000000, ,000
It and when the excise tax schedule
reaches President Truman in legislative
form, it will undoubtedly provide for deeper
cuts. The tax reduction on passenger fares
from Is to 10 per cent is held to be entirely
inadequate. So is the proposed reduction
on long distance telephone calls and tele-
grams from Is per cent to Is per cent.
Further, the failure to include any reduction
at all in the tax on local telephone services
IS met with screams of pain Nor do the
proposed reductions from 20 to 10 per cent
on luggage, toilet preparations and furs
make hit, certainly not with the thousands
OF women who buy and use them.
There is strong demand that the Admin
istrations plan for "one package" tax bill.
covering excise taxes and the administra-
tion's proposed tax increases on corporations,
"loopholes" in the tax laws, be jllnked and
that an excise tax repeal and reduction bill
be enacted quickly. The House Ways and
Means Committee, by strict party vote,
turned down such proposal made by Rep
resentative Woodruff Republican, of Michi-
gan. But there will be other attempts-and
the pressure to get tax relief from many
sources may yet force a change in this atti-
tude. even should it mean that President
n mi
Familiar Pattern. -;
The Administrators recommendations re-
garding corporation taxes follow a now
familiar pattern-taxes are to be increased
on the larger corporations doing the most
business. However, the larger corporations
have thousands of stockholders, many of
them persons of moderate means. 1t is the
incomes of these lower income groups which
will be hit. Frequently smaller corporations
are owned by very few persons, sometimes
by the members of one or two families.
The Administrations proposals for tax in
creases on estate and gift taxes are calcu-
lated to bring in an additional $400,000C00
revenue from those already heavily taxed
sources.
It remains to be seen whether the Admin
istration can hold its tax line. It failed to
do so in 1947-48 when Congress overrode a
Truman veto of a tax reduction bill. Ma
tional defense needs will be strongly urged
as a reason for holding onto and increasing
taxes.
At the same time, however. an election is
coming up, and the demands for tax relief
are mounting.