Evening star., 1951-02-03
Mr.. Truman on Taxes

Mr.. Truman on Taxes
In his tax message to Congress- the President
has outlined tough but basically reasonable
program that ought to be acted upon with the
least possible delay. Mindful of the mistake
made during the Second World War, when we
resorted to deficit financing on an astronomical
scale, he has taken a strong and highly COM
mendable stand in favor of 'pay-as-we-go"
basis for our great new preparedness effort
That objective-to put the budget in balance at
time when continuing red-ink operations can
only add dangerous weight to q national debt
that has fattened into more than a quarter of
trillion dollars-is something no one can
argue against. 1t needs to be pursued as matter
OF urgency, even if the American pocketbook
must be hit hard in the process.
Certainly, as far as the Nations internal
economic strength is concerned, few things could
be more essential in these days than that Con-
gress make every effort to provide for balanced
budget or for one that will be as nearly balanced
as possible. For 1t Is true, as the President has
said, that budget Of that kind 'is just as
important a mobilization measure as larger
armed forces, ALLEGATIONS of basic materials. and
controls over prices and wages" This is so for
three major reasons, among others: Cd Because
"pay-aS-we-go" system Is "the way to keep
the Governments finances on sound footing"
w peCduSt IL Is HeeueQ 10 distribute Cne cost
OF defense fairly" and (3) because 1t will help
to combat tnfationary pressures which consti-
tute mounting peril in period of full employ
ment high personal earnings and decreasing
quantities Of consumer goods.
But pay -we-go" operation cannot be
carried out panleSsly. Mr.. Truman has not tried
to sugar the pill for anybody AS a starter, he
has called upon Congress to move as promptly
as it can to enact legislation to raise additional
revenues of at least $40 billion year. He wants
50 billion OF this sum to come from increases in
selective excise levies on the less essential con-
sumer goods, presumably things like liquor and
other luxuries. He wants another SO billion to
come from higher taxation on corporations And
he wants 81 billion more to come from hike
in personal income taxes In the latter field,
moreover he has made a special point of en-
phasizing that a soak k-the-r rich" approach will
not do, that the burden must be shared equitably
by all taxpayers, and that that means even the
man who has wife and two children and who
earns as little as $50 week.
However, even If Congress acts favorably
on all this, total revenue for the fiscal year
ending June 80, 1852, is expected to be only se4
billion, and that sum-although far bigger than
the tax collected in any of the deficit financed
war years-will be upward Of So billion less
than the ST. billion earmarked for spending In
the Presidents budget. Accordingly Mr.. Truman
has warned that additional increases, over and
above the $40 billion recommended for imme-
diate enactment, will in all likelihood be neces-
sary if the 'pay-as-we-go" objective is to be
achieved. But there is no way of being sure at
this time of just how big those increases will
have to be, and so he has suggested that the
matter be dealt with some months from now
when everybody will be in better position to
judge-in the light of intervening economic de-
velopments and possible changes in the world
situation-the best way to balance income
with outgo.
Although few are likely to challenge the
need for speedy steps to increase revenues by
$40 billion, there are many in Congress who
will look long and hard-as they ought to-at
the Presidents assertion that additional increases
will have to be made later on in the year. Led
by Senator Byrd they will hammer away at the
line that Sc billion or more can be cut from the
non-defense items in the budget. Mr.. Truman
\ holds that they are wrong, and it will be up
to them to prove that they are right They
should be encouraged. For they will be rendering
the Nation a great service if they can effect
substantial economies in non-essentials-
omies that will make unnecessary or sharply
modify, action to impose still higher taxation on
the American people and American enterprise
In any event, however-and a marked de-
terioration in the international situation could
make all figures meaningless overnght-it is
obvious that the Nations taxpayers have got tc
pay out a lot more than they are paying out now
The only alternative is to let deficit pile deficit
until the debt becomes a load whose weight
could break the back of our American economy
Just before the Second World War, that debt
amounted only to $40 billion, but today (the
figure cannot be reStated too often) it amounts
to more than quarter of a trillion dollars We
cannot let it grow indefinitely and still continue
to maintain internal strength. We must
guard ourselves in that respect just as much as
we must guard ourselves against external aggres-
sion. Mr.. Truman's message makes excellent
sense on that score.