Evening star., 1951-02-02
Truman Tax MESSAGE Text
The tert of President Trunans

The tert OF President Trunlan's
tar message tollo1Ds:
In the January messages to thl
Congress I stated my intention o
making further recommendation
on a number of important mat
ters. One of the most urgent o.
these is the need for increasee
taxation.
The budget for the fiscal veal
ending June 30, 1852, which wa:
transmitted to the Congress. in.
cluded estimated expenditures o.
7l6 billion dollars, and estimated
receipts under present tax laws O.
55.1 billion dollars.
1t is my firm conviction that We
should pay for these expenditure:
as we go. A balanced budget nov
Is just as important a mobiliza-
ton measure as larger armed
forces, ALLEGATIONS of basic ma
terial and controls over prices ano
wages.
This is true. for three main
reasons.
Strengthening Security.
First. we should pay as we &c
because that is the way to keep
the Governments finances on a
sound footing.
We are now strengthening ou1
national security, in order to in
crease our ability to meet what
ever situation may arise in the
future. Our Government financial
policies, like every other part OF
our national effort, must be de-
signed to leave us stronger, not
weaker, as the years go by. If in
this period we pay for our neces-
sary expenditures as we go along
rather than adding to the public
debt, We will obviously be better
prepared to meet our future needs
whatever they may be.
There is a question as to how
high we can push taxes without
having serious effects upon the
productive growth of our economy
But I am sure that we could in
crease Federal revenues by con-
siderably more than enough to
cover the expenditures now antici-
pated without reaching those linn
its. During recent years we have
taxed ourselves at high levels
and during those years our econ
omy has bounded forward: In
comes have risen rapidly, new
plants and industries have sprung
up, and the standard of living of
our people has increased steadily.
The growth in the strength of our
economy that has occurred under
these tax rates gives us confidence
that we can safely pay the es-
tlmated expenditures for the next
fiscal year out of taxes.
Cost Is Inescapable.
Second. we should pay for de-
Tense as we go because that is
the way to distribute the cost of
defense fairly.
We cannot escape paying the
real cost of defense now-the cost
In materials and days of work
that are devoted to defense pur-
poses. Whatever we do about
taxes, the amount of goods avail
able for consumers to buy is only
going to be what is left over after
defense needs are met.
We could try to escape the
financial cost of defense by bor-
rowing-but that would only
transfer the financial problem to
our children. and would increase
the danger of imitation with its
grossly unfair distribution of the
burden.
The sensible and honest thing
to do now is to tax ourselves
enough, as We go along, to pay
the financial costs of defense out
OF our current income.
Incentives Protected.
Our Federal tax system can
spread the cost of defense fairly
among our people. There are
many ways in which the fairness
OF the present tax system can and
should be improved, but on the
whole we have good system. 1t
recognizes differences in incomes
and in family obligations. It pro-
tects incentives for initiative and
effort. 1t takes account of the
special needs of new undertak-
ings and the expansion of existing
businesses.
1 am convinced, after studying
the matter thoroughly, that the
people of our country-and I am
thinking primarily of the average
family of modest income-will all
be better off if everybody pays his
fair share of the financial costs
OF defense in taxes now. If we
don't do that, we will only be
putting off the evil day, and max
ing matters worse for ourselves In
the future.
Third, we should pay as we &c
to help prevent imitation.
If we do not tax ourselve.
enough to pay for defense ex.
pendltureS, the Government will
be spending more than it takes in
and the extra money it spend.
will add to total purchasing power
and inf1ationary pressures.
Much Cash Accumulated.
Infationary preSsures will be
strong, of course, even with the
budget balanced. Military pro.
duction results in wage payments
and buying of materials. long be-
fore the goods are produced ane
paid for by the Government. Bus
inesSmen who build new plant.
spend money we'll in advance O.
producing any goods for the Gov
eminent or consumers to buy
Furthermore, consumers have &C
cumulated large amounts of cash
and other liquid assets which the,
are free to spend if they so choose
Thus, infationary pressures vii
be strong even after taxes are in
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