Milford chronicle., 1951-06-15
OUR TAX PROBLEM

E1dCtlCdLy everybody LalkS ABOUT TAXA
ton, governmental budgets and related prob
lens. But relatively small number of peo-
pie knows much about them. By the same
token, there is endless talk as to just what
the governments tax and fiscal policies
should be in the current emergency, but few
OF US are in a position to suggest anything
tangible
The Committee for Economic Develop
ment-a nOn-pOlitical and nOn-prOfit Organi-
zatiOn of some 130 leading businessmen and
educators who are devoting their time, ex-
perlence and resources to objective economic
research-has proposed a program which,
it believes, meets the needs of the moment.
Not everyone will agree with all of it. But
1T is significant contribution to the litera-
ture on a complex and extremely important
subject.
CED says that higher taxes are neces-
saTy. But" it adds, "there is also a danger
In higher taxes. The danger is that extreme
ly high taxes especially if long continued
and badly distributed-will interfere with
the growth of production, which is also one
OF our main economic Objectives. In
TACT, there is danger that taxes will be at
the same time too high and too lOw-higher
and more harmful to production than would
be necessary If effective action were taken
with respect to government expenditures,
credit expansion and savings and yet not
high enough to control inflatiOnary pressure
in view of the other policies that are actually
followed. If, in addition, the taxes we i'm
pose are of kind that put great restraint
upon production and relatively little re-
Straint upon imitation, we shall have taxed
ourselves at great cost for little benefit"
CED proposes a four-part financial pro-
gram which it considers adequate and bal
anced. First, the proposed 1852 budget
would be cut by $6,000,000,000 Second,
taxes would be increased by $4,000 100000.
Ihlrd, tight restrictions would be placed on
credit Fourth, national program to en-
courage private savings would be instituted.
1t is one thing to advocate tax increases
and another thing to figure out where they
could be imposed without undermining the
economic machine CED's plan in this re-
gard has three main facets. First, individ-
ual income taxes would be raised by five per
cent on taxable income after present ex-
emptlons and the present tax. Second. the
combined income tax rates on corporate
profits in excess of $4,000 would be raised
from the present AZ per cent to so per. cent.
Third, new excise tax of five per cent
would be imposed on goods sold at retail. .ex-
cludlng food, housing, utilities and certain
other items. The present manufacturers
excise tax on a number of commodities. such
as automobiles and other durable goods,
"ONtN ssaSO DS Aos4SSu' CG4O likewise recon-
mends that various "loopholees" in the tax
laws-such as that which exempts cooper-
ative businesses from taxatiOn-be plugged
up
Generally speaking, this is the kind Of
tax and budgetary program which most
economists favor now The heavy emphasis
that is placed upon strict government econ
omy is of particular significance. Some think
the budget can be cut by substantially more
than the $6,000,000,000 CED recommends.
Aside from the precise figure, almost ali are
dead certain that big reductions are both
possible and necessary.