Evening star., 1951-02-14
Johnston Urges
Speedy Action
On Tax Boost
Delay Will Eat at
Economic Strength,
House Hearing Told
By Cecil HoIIond

OtdUlllldIlOL OlIeCCOr ErlC
Johnston today urged Congress to
act with the greatest speed" in
voting higher taxes as an essential
step in curbing imitation.
Delay will eat at our economic
strength" Mr.. Johnston declared.
The stabilization director testi-
fled before the House Ways and
Means Committee now considering
President Truman's request for an
immediate increase of $40 billion
in taxes with an additional $6.5
billion to be provided later. The
increases, if granted by Congress.
would bring the Nations tax bur-
den to record levels-far above the
previous totals of $43 billion COL
lected during the World War II
year of 1945.
No. l Problem.
Mr.. Johnston said the tax in
crease was the number one prob
lem for Congress to meet now in
the area of economic stabiliza-
ton.
He said that wage and price
controls recently imposed were
intended ito jam the brakes on
imitation"
"These controls" he added, ARE
needed but can't alone do the job.
They will be in constant jeopardy
so long as taxes remain at present
level. You can help to make
them effective by draining of
excess purchasing power through
higher taxes all along the line"
Any delay in increasing taxes,
Mr.. Johnston testified, will en-
danger the Governments fiscal
position through rising debt and
higher prices for military goods
and also will hurt the welfare Of
our whole economy"
Mr.. Johnston said the tax in
crease should be imposed on q
fair basis and should not in them
selves contribute to imitation. In
this connection. he testified he be-
lieves a general sales tax, advo-
Gated in some quarters, would be
less desirable than some other
forms of taxes"
Lower Standard Seen.
Under questioning by Represent
ative King, Democrat, of Cali
| fornia, Mr.. Johnston urged the
proposed tax increases be made
effective as of January l. This.
he explained, would make the
wage and price control program
more effective in curbing imitation.
/ Mr.. King asked if the tax pro-
gram would not mean that the
country's standard of living can't
be as high this year as last year.
Il think it will be slightly
lower" Mr.. Johnston replied.
| Mr.. King then inquired if it
would be possible to hold the line
against imitation without a tax
increase.
I'VE might hold it for 8 or 10
months, but it would be difficult
to do So" Mr.. Johnston said.
Requirements Discussed.
The witness testified that tax
increases asked by Mr.. Truman
should not be delayed simply be-
cause 1--WE do not know what pre-
else amount will be required in a
year-or two years hence-to
achieve a balanced budget"
Military requirements indicate
that at least an additional $40
billion will be needed in the next
fiscal year. Mr.. Johnston said, de-
spite whatever adjustments that
may be made in President Tru-
mans record $716 billion budget
for the fiscal year beginning next
July l.
Chairman DoughJon noted that
Mr.. Johnston was urging the tax
increases as speedily as possible
and asked:
How far do you think we should
go in giving hearings to those
who will have to pay the added
taxes?as
I'm not suggesting that you
not give hearings to persons who
should be heard" Mr.. Johnston
replied. But he added that he
(See TAXES, Page A-4.)