Evening star., 1950-01-23
Plan Would Affect
Movie, Insurance
And Oil Interests

WV sthS Sf ~HsSS
And Oil Interests
FOLLOWING is the tert OF Presi-
dent Trundn's tar message to
Congress-:
The tax policy Of the United
States Government is of major
significance to the national Wo!-
fare. Taxes are the means by
which our people pay for the ac-
tivities of the Government which
are necessary to our survival and
progress as a Nation. Decisions
about Federal tax policy should
be made in full recognition of the
economic and budgetary situation,
and should contribute to our ma
tional objectives of economic
growth and broader opportunity
for all our citizens.
At the present time, I believe
we should make some revisions in
our tax laws to improve the fair
ness OF the tax system, to bring
in some additional revenue, and
TO strengthen our economy.
Our general objective should be
O tax system which will yield
sufficient revenue in times of high
employment. production, and ma
tional income to meet the neces-
sary expenditures of the Govern
ment and leave some surplus for
debt reduction. In the budget
message, I estimated that receipts
in the fiscal year 1851 will fall
short of meeting expenditures by
81 billion dollars. This deficit
will be due largely to the Short
sighted tax reduction enacted by
the 80th Congress, and to the pres
ent necessity for large expendi-
lures for national security and
world peace. Moreover, owing to
the time lag between corporation
earnings and tax payments, the
194s decline in corporation profits
will be reflected in lower tax re-
ceipts in the fiscal year 1851.
Outlines Three-Fold Policy.
The policies I am recommend
ing to the Congress are designed
TO reduce the deficit and bring
about budgetary balance as rap
idly as we can safely do so. These
policies are three-fold: First, to
hold expenditures to the lowest
level consistent with the national
interest; second, to encourage and
stimulate business expansion
which will result in more revenue:
and third, to make a number of
changes in the tax laws which will
bring in some net additional rev.
enue and at the same time i'm
prove the equity of our tax system.
First, as to Government eX-
penditures.
I have recently transmitted to
the Congress a budget contain
ing recommendations for appro-
priations and estimates of ex-
penditures for the fiscal year 1851.
This budget was carefully pre-
pared with a view toward holding
expenditures to the lowest posi-
Bile Levels consistent with the re-
quirements of national security,
world peace, economic growth,
and. the we'll being Of our people.
The decisions of the Congress,
rs well as unpredictable changes
in circumstances over the next 18
months, maJ alter in many par
ticulars the character and amount
of the expenditures contemplated
m this budget. Nevertheless, I
believe the estimates contained in
the budget represent the most
realistic appraisal that it is pos
sible to make at this time of the
necessary expenditures in 1851. I
believe the Congress will generally
concur In this view after it mas
had an opportunity to consider
these estimates carefully.
Cites Cut in Estimates.
The expenditures estimated in
the 1851 budget have been re-
duced by about 900 million dollars
below the level estimated for the
present fiscal year. The policies
recommended in the budget will
permit further reductions in SUBJ
sequent years as the costs of some
OF the extraordinary postwar pro-
grams continue to decline.
To achieve these reductions we
must continue to practice rigid
economy. At the same time, it
would be self-defeating to cripple
activities which are essential to
our national strength. 1t will re-
Quire wisdom and courage TO find
and hold fast to the course of wise
economy without straying into the
field Of foolish budget slashes.
Second, as to the strength and
growth of our national economy
We cannot achieve and main
tain balanced budget without a
strong and prosperous economy
A recession in economic activity
would call for increased Govern
ment expenditures at the same
time that revenues were reduced
thus creating greater budget
deficits.
At the present time the econ
omy of the United States is grow
ing, and we have every reason to
expect it to continue to expand
II we follow the right policies. II
Is largely the task of private busi-
ness to achieve this growth. The
Government, however, can and
should contribute to it. Through
such cooperation national en-
ployment and income will grow
This will result, in time. in in
creaSing Government revenues.
Just as the condition of our ma
tional economy has an overriding
effect upon our efforts to balance
the budget, so do our policies for
managing the Federal budget
have q decisive effect upon the
national economy. Drastic re-
ductions in Federal expenditures