davidaulloa/AmericanStories huggingface dataset:
Evening star., 1953-10-04
Review Of The Week. Tax Problem Faces White House
TINE POLITICALLY IIcKL1sH

TINE POLITICALLY T1CKLISH
IL question of taxes was out In
the open last week-or at least
as far out in the open as 1t is
likely to get until Congress re-
convenes in January.
At his news conference WedneS-
day, President Eisenhower pretty
definitely eliminated a general re-
tail tax as an answer to the
Governments fiscal problems
This left for the Nation the clear
inference that a manufacturers
excise tax was high on the list of
possibilities-if indeed 1t was not
the only possibility.
The big question posed by the
Presidents remarks was whether
the administration could get away
with it. Many Democratic and not
a few Republican leaders have
vetoed in advance any thought of
q sales tax. And vociferous ele-
ments-labor unions and liberal
groups among them-will not let
Congress forget that, in practical
effect, q manufacturers excise tax
is Just a sales tax operating under
an alias.
A Democratic Plan?
It was a political problem of the
flrSt rank. The Democratic ad-
miniStration and Congress Of
1872 made q shrewd political
move when they built the tax
ediflce on which Gen. Eisenhower
now stands. When the Repubn-
cans won last November, the Dem
ocrats were left in an enviable
position. If times made it possible
for the Eisenhower administration
to reduce taxes on schedule, the
Democrats could take credit for
writing the tax laws that way. But
II the administration had to ask
for new taxes or an extension of
the old ones, the Democrats could
blame the Republicans. In short,
the Democrats could hardly lose.
Political considerations aside,
the hard> facts of arithmetic re-
manned. Present taxes are on their
way down, and there are indica-
tions that Government expendi-
lures in coming years may be on
their way up again. How the
administration could fulfill it's tax
and get-balancing promises
without new levies to take up the
slack was, to put it mildly, unclear.
Evening star., 1953-10-04
United Nations
THE OPENING DEBATE period

THE OPENING DEBATE period
l. of the U. Ms eighth session
ended last week with India's plea
for Big Four meeting. The Gen.
eral Assembly then broke up into
committees and tackled the job
of working out tentative solutions
to world problems.
The first snag was hit when the
Credentials Committee passed on
to the General Assembly it's rec
ommendation to seat all delega-
tions which had turned up for
the eSsion-including the Chinese
NationaliSts.
Indias Krishna Menon promised
that he would oppose the seating
of the Nationalists on the grounds
that they did not represent China,
but only the island of FormoSa.
But before Mr.. Menon could voice
India's objections, Soviet Delegate
Georgi N zarubin, Russian Am
basSador to Washington, gained
the floor and made the same
points against the Chinese dele
cation. He did not, however,
move to admit the Chinese Com
muniStS instead.
Another Indian, Vijaya Lakshmi
Pandit, put stop to the custer
move. Nine. Pandit is the presi-
dent of the General Assembly for
this session, and in that capacity
she pointed out to Menon and
Zarubin that the members already
had voted not to take up the Chi
nese question until after January
/. Any challenge now, she said,
would be out of order.
Mr.. Menon and Mr.. Zarubin de-
clined to dispute that ruling. The
Credentials Committee report
seating all delegations was ap-
proved 48-5, the Soviet bloc voting
no, India abStaining
Aqendo right AVerted
The next committee to take the
spotlight also acted to postpone
fight. The group was the Polit-
ical and Security Committee, and
it's first job was to draw up COM
mittee agenda.
The Soviet bloc wanted to take
up, first, the question of the make
up of the post-Korea political
conference. Andrei Vishinsky,
chief Soviet delegate, said Asian
"neutra" countries we're waiting
for an invitation. If discussion Of
the invitation were postponed, he
warned, there is no reason to
hope that successful work will be
done at the conference; in fact,
there is no hope that the confer
ence will even take place" That
was broad hint, of course, that
if the Soviet proposal to bring in
the 'neutrals" were not taken up
at once, the Reds might scuttle
the conference.
The western allies, however,
maintained that the question Of
participation in the conference
Continued on Page A-27)
Evening star., 1953-10-04
Big Four
HIGH POINTS of the 1858 Com

~ 1GH POINTS OF the 1858 Com
= munist peace offensive were
the Soviet notes of August 4 and
August IS sent to Britain, France
and the United States to propose,
first, a conference of the Big
Three plus Russia and Red China
to consider measures assisting
the general lessening of tension in
the international situation" and.
second, a conference of the Big
Three and Russia to study the
German problem"
Neither proposal carried any in
dication that Russia was about to
become reasonable in her de-
mands. Nevertheless, the Big
Three on September 2 sent
counterproposal suggesting a for
eign ministers meeting on Ger
many and Austria in Lugano,
Switzerland, to begin October IS.
The thought was that if Russia
co-operated at Lugano, further
negotiations would be in order.
Red Reply
Last week, the three Western
capitals received Russia'S reply.
It was rambling 3,000-word
preciS on world affairs which, in
effect, restated the same old Com
munist suggestions: A Big Five,
unlimited-agenda foreign minis
terS' conference; and a Big Four,
unlimited-agenda foreign minis
ters' meeting on Germany. No
mention was made of the specific
Western proposal of a Lugano
conference.
The State Department and the
British Foreign Office agreed the
Soviet note amounted to rejec-
tion of the Lugano meeting and
added nothing to East-West un-
derstanding. The note was "eva-
Sive" and "dilatory," a State De-
partment spokesman said. Amer
ican diplomats, however, said they
were ready to give it another try.
Churchill and Menon
But there were indications last
week that diplomacy might take
another direction. In London,
Prime Minister Churchill renewed
his request for Big Four heads
of-state conference on all world
problems. Action on his original
request had been postponed in
June when Mr.. Churchill fell Ill.
India added her pleas for top
level conference last week when
V. K. Krishna Menon, chief In
dian delegate to the United Ma
tions, told the General Assembly
there should be an informal
meeting" of the Big Four heads
of government. This meeting, he
acknowledged might not find a
magical" formula to solve world
problems. But at least it would
clear the air."
The Indian bid was significant.
Spokesman for many of the "neu-
trails" in the cold war, Mr.. Menon
had to be taken seriously.
France, of course, was ready to
go ahead with a top-level confer
ence. The decision was up to the
United States. And in Washing
ton, the view had been that a
meeting of national leaders would
be worthless unless Russia showed
Evening star., 1953-10-04
How Much Tax?

a general excise TAX on manu-
factured goods has been suggested
as an easy solution to the fiscal
puzzle. 1t is solution, certainly;
it will not be easy.
Whenever taxes are discussed.
people have way of asking, How
much?" One familiar figure
familiar because it has been circu-
lated widely by the pro-excise
National Association of Manufac-
turers- is "412 to per cent"
But no one-NAM included
seriously contends that Az or S
per cent would close the gap for
the Government. In fact, all NAM
claims is that If a general excise
tax of that size were laid across
the board, it would bring in as
much as now is raised by selective
excise taxes. That calculation is
debatable, but apparently is not
too far out of line; it might, actu-
ally, take 6 or 6la per cent to do
this job.
The ReoI Job
But this is not the job to be
done. The real job would be to
raise:
. Money lost by the reduction
of income and excise taxes pres
emily scheduled: Eight billion.
. Money lost by the abandon
ment of selective excise taxation
in favor of general excise taxation:
An additional $45 billion.
. Money to cover the. present
budget deficit: An additional 81
billion.
What does it add up to? A total
fund of $16.5 billion to be raised
through excise taxation in order
to keep the Government solvent
with spending at current levels.
And how heavy a tax will be
needed if $165 billion is to be
raised? The answer to this de-
pends, of course, on the scope of
a general excise tax. No one has
seriously suggested taxing food. 1t
is unlikely that rents and medical
care could or would be taxed And
alcohol and tobacco would be
exempted from this taxation be-
cause they would remain subject
to the far heavier levies that exist
now
A 20 Per Cent Tax
These exempted items represent
about 81 cents of the individual
consumers spending dollar, ac-
cording to the Bureau of Labor
Statistics. Excise taxes would
effect no more than 43 per cent of
the market basket" And
economists calculation this
basis, l per cent of taxation at
the manufacturers level will bring
the Government $500 million.
Twenty per cent would bring, in
SIC hillion-juSt short of the de-
sired amount. So to do the job
would take a tax of 20 or 81 per
cent.
OF the manufacturers excise
taxes currently in force, only three
are this heavy. Twenty per cent
exciSes now are laid on photo
graphic apparatus, Photographic
film and electric light bulbs. Such
comparative luxuries as television
sets, sporting goods and cigarette
lighters are taxed at only half to
three-fourths of this amount.
Anything the Government can
do to cut costs will help, of course.
But even slashing expenditures
by 81 billion would still mean a
tax of Is or 16 per cent.
The only alternative to such
a tax is at least equally horrible to
contemplate, from political point
OF view. To raise $16.5 billion.
through income taxes, it would be
Evening star., 1953-10-04

be more than 800 cases, not all of
which need necessarily be heard.
Some of theSe-like the school
segregation suits-are of immeas-
surable Importance. Others are
less crucial, but none is trivial.
On accepting the appointment
last week, Mr.. Warren displayed
a becoming humility. He appeared
fully aware that, in the biggest
judicial job in the world today, he
has lot to learn.
Evening star., 1953-10-04
Til e Big If

Such facts make the attitude of
Congress to general excise tax
proposal a huge question mark.
Whatever Congress does, it will do
only under tremendous presSures
and counterpressures from groups
economically to the left and right
of center. Those to the left, like
labor unions, will fight the tax to
the end and will try to get their
members to vote against those who
support the plan. Those to the
right, like manufacturers, will use
every weapon possible to get the
tax approved.
OF course, it is not yet officially
a foregone conclusion that Gen.
Eisenhower will ask for a manu-
facturers' excise tax. However, it
is inconceivable that he can seek
anything else. AS has been shown,
the big money lies in three piles:
Individual income, corporate in
come and excises-and cuts in
both forms of income taxation are
already firmly promised. 1t would
make little political sense to let
income taxes decline in December
only to ask that they be raised in
January. That seems to leave the
excise tax.
Political Cyonide y
The retail sales tax was dropped
by the administrations indeed
it ever was seriously considered
because it is political cyanide.
Not only such diehards as House
Ways and Means Chairman Dan
Reed, but also administration
Stalwarts like Senators Carlson of
Kansas and Wiley of Wisconsin,
joined to put the quietus on sales
tax talk almost as soon as it began.
Equally firm opposition has not
yet developed to the manufac-
turers' excise tax. Politicians seem
to feel that tax at the production
level is politically feasible in con-
trast to levy at the retail counter.
Yet, paradoxically, the manu-
facturer's excise tax is subject to
'pyramiding" of markups by
middlemen, while the retail sales
tax is not. Consequently, it is
possible for the excise tax to cost
the public more without giving the
Government any more than it
would raise from sales tax. NAM
and other eXcise-tax proponents
deny that this "pyramiding"
,uould happen, but no one disputes
the fact that it could happen. And
if it did occur, the difference in
cost to the consumer might pos
sibly run as high as or per cent.
Political feasibility is not the
only reason the Government
favors the excise tax over the sales
tax. There is a sound admins
trative reason for wanting the
former: The excise tax is far easier
to collect.
There would be a few wrinkles
to be ironed out before an excise
tax law could be written. But these
are administrative, such as ar
ranging for system of exemptions
on articles (like spark plugs that
may be either end-items in them
selves or sub-assemblies in another
manufactured product. Treasury
officials see little difficulty in ar
ranging a system of exemption
certificates that would take care
of this.
They do see, however, lot more
difficulty in convincing an cleo
ton -jittery Congress of the need
for a tax that could pile the price
of q pair of shoes atop the cost
of suit of clothes; the price of
a suit on a home freezer, or the
price of q freezer on q new car.
Evening star., 1953-10-04
Dock Strike

A/ I1EN LIE 4d1t-1drCl6y dCC
W was written in 1947 it was
foreseen that there would0 be
strikes where the Federal Govern
ment, in the national interest,
would want to return workers to
their jobs in vital industry while
Government mediators helped
labor and management come to
an agreement. To meet such
situation, the law provides this
machinery:
The President appoints a team
of fact-finders to study the situa-
ton. The President then studies
the facts" If necessary to pro-
tect the health and safety of the
Nation, he orders the Justice De-
partment to ask Federal district
court to issue an injunction, halt
ing the strike for 80 days. During
the cooling off" period the COM
pany and the union negotiate with
the help of the Federal Mediation
and Cancellation Service. BY the
end of IS days the National Labor
Relations Board must conduct a
secret ballot of union members to
see if they will accept the last
company offer. If there is no set
tlement at the end of 80 days the
strike is resumed.
Last week, however, the Govern
ment was faced with an unprece-
dented national emergency strike
situation. It was in the interests
of the Nation this time for the un-
ion and employers not to reach
agreement. Yet work had to be
resumed.
Two ILAs
The strikers were led by the
crime-ridden International Long
shoremen's Association. Less than
two weeks ago the American Fed
Grafton of Labor expelled the lila
for corruption and set up a rival
ILA-AFL. The old lila tried for
a quick agreement with the ship
perS on contract which would
give the union a years hold on
the docks. But. the shippers would
not sign. The old contract ex-
pired last Wednesday, and the lila
ordered its men out on strike.
The walkout of $4,000 men tied
up the giant Port of New York and
all important harbors from Port
land, Me-, to Hampton Roads, Va.
Shippers were pressured from
all sides-except the old ILA-not
to sign contract. Gov. Dewey OF
New York, for instance, said he
would be shocked" if the shippers
signed with the "old racket-con-
trolled union" He added, "It
would make our job much more
difficult; our job is to clean out
the gangsters and racketeers from
the water front"
Still, work had to be resumed.
A prolonged strike, cutting off i'm
ports and exports, would put a
serious crimp in the Nations in
dustry.
Toft-HortIey Invoked
So the President turned to the
Taft-Hartley law. He appointed
three fact-finderS and thus set in
motion the process which will lead
to an injunction. The fact-finders
will report by midnight tomorrow
The injunction could follow in
day or two.
That will stop the strike, but
then what?-Will the Govern
ment help the old lila and the
shippers reach an agreement, as
is provided for under the law?
Government officials were ponder
ing that question this week end.
Meanwhile the new ILA-AFL
was working around the clock to
lure longshoremen away from the
old union. There was good break
In Philadelphia where two LA
Evening star., 1953-10-04
The Tax Status

There are dozens of kinds of
taxes levied by the Federal Gov
ernment. But of them all, only
three contribute more than trifing
amounts. The broad categories
are:
individual income tareS, about
$33 billion; corporate income tareS,
including the excess profits tax.
about $22 billion; erciSe leuies of
all kinds, about $40 billion. All
other taxes and miscellaneous
receipts total only about 81 billion.
Though this adds up to 500 billion,
adjustments reduce the net reve-
nue. to about $65 billion-almost
exactly the amount currently real
lied from income and excise
taxation.
Impending Reductions
Present laws call for reductions
totaling So billion a year to take
effect in the next six months.
These are:
. Individual income taxes, to be
reduced about 10 per cent starting
January /, causing an estimated
revenue loss of So billion a year.
. Corporate income taxes, to
receive two cuts in the near future
the eXcesS-prof1ts tax to end
December 81 at an annual loss of
So billion and the corporation sur
tax rates to be reduced per cent
in April at an additional loss of
So billion-for a total of 81 billion.
. Excise taxes, some to be re-
duced in April, at a further drop
in revenue of about 81 billion a
year.
If all these cuts go into effect
on schedule, the Governments
revenues will be off So billion
year from the present take.
President Eisenhower, through
his Treasury Secretary, George
Humphrey, already has committed
himself not to extend the excess
profits and individual income levies
beyond December. But signifi-
cantly, the administration has
been silent of late about the
scheduled surtax and excise re-
ductionS. The last word on these
subjects came from Gen. EiSen-
hover last May, when he asked
Congress in a tax message not to
let the two levies expire. Congress
has not acted on his requests.
Persuasion Needed
1t would follow then, that there
is an automatic, foreseeable loss
of SIS billion Immediately in the
'offing and a better -than-even
chance of loss of So billion more.
To prevent this added cut, the
President will have to make a
strong and persuasive case to
Congress. Even then, it will not
be easy to get the legislators to
authorize tax extensions in an
election year.
Viewing only the imminent loss
of SIS to So billion, the magnitude of
the administrations task is obvi-
GUS. But So billion is only part of
the story. If the President seeks
the solution to his problem in what
administration spokeSmen have
called "a more equitable program
OF excise taxation" he nay have
Evening star., 1953-06-14
Tiny Railroad Tours
Cranberry Plantation

PLYMOUTH. Mass.-Guided
tours of the worlds largest cram
berry plantation and it's packing
house at Edaville, South Carver,
Mass, just outside of Plymouth,
is becoming a must for tourists
visiting the Bay State. The 5h-
mile tour is enhanced by riding
She Edaville Railroad, a privately
owned narrow-gauge line. Com
plete from ticket Office and uni
formed train crews to ornate par
lor cars, this real railroad in
miniature is a vacation novelty.
The equipment consists of 20
passenger coaches, six steam en-
gines and many freight cars.
Evening star., 1953-06-14
Airline to Sturt
Flights to Shore
Resorts Tuesduy

Allegheny Airlines' summer
services to Cape May-Wildwood.
N. j., and Georgetown -Rehoboth,
Del, will begin Tuesday and con-
tinue through Labor Day. Flights
to the Atlantic shore resorts will
operate between Washington.
Baltimore and New York, via
Atlantic City and Asbury Park.
With the Inauguration Of Ale
gheny's new routes last week. be-
tween Cleveland, Philadelphia
and New York, through a num-
Der Of Pennsylvania commune
ties, the Lake Erie resort area
and Chautauqua Lake, N. Y, will
be provided with direct air serv-
ices from Eastern cities for the
first time.
Allegheny also started direct
services last week between the
Eastern Shore resorts near
Easton. Md, and New York City.
Evening star., 1953-06-14
To Montreal, Quebec
and Trois Rixieres

beautiful hotel. Fortifications for
its citadel. atop Cape Diamond
were designed by the Duke OF
Wellington.
Decisive History
It was on the Plains of Abra-
ham, now q part Of Battlefield
Park, where. in 1859, the course
Of world history changed in Is
minutes. That is how long the
struggle between Gems. Wolfe
and Montcalm lasted, but the
fate Of Canada hung on the win
ming Of that fight.
The return trip leads through
Plattsburg. N. Y, a resort and
army training camp center. 1t
is from this point that the map
guides the motorist through a
large portion of Adirondack for
est preserve, and on to Glenn
Falls. Albany, capital of New
York State, lies midway between
Glen Falls and Kingston.
This trip can be made in six
days, according to the AAA, but
If time is allowed for even a rea-
sonable amount of sightseeing,
the schedule should call for
about Is days.
Evening star., 1953-06-14
TruveI Tax
Repeal Held
Unlikely

NEW YORK.-Transportation
officials here are virtually unani-
nous in predicting that repeal
Of the Is per cent tax on domestic
travel will not be approved by
the House Ways and Means
Committee at hearings this
month. according to the Ameri-
can Express Travel Survey and
Forecast for June.
A survey of 20 major airlines
and railroads revealed that the
most optimistic had hoped for a
reduction, while the majority
expect it to remain in full effect.
The consensus is that hopes for
repeal are premature as long as
the administration favors extern
sion of present individual income
and excess-prof1t taxes.
Those favoring repeal point
out that the tax was established
in 1941 to discourage unneces-
Sary wartime travel and not as
a revenue-producing measure.
They argue that the tax has
outlived its usefulness and now
acts as deterrent to domestic
travel. Others maintain that
the tax has become an important
source of Federal revenue in the
postwar years and is not likely
to be eliminated while the Gov
ernment operates at a deficit.
Low-income vacationers are
hardest hit by the tax. One
railroad has noted a sharp de-
cline in the volume of school,
teacher passengers, who formerly
took extensive trips during vaca-
tion months. Airlines and bus
companies also have observed q
dropping off of marginal"
clients who cannot afford both
the fare and tax.
Even Canadian railroads are
affected. Thousands of Ameri-
can families who would other
wise travel on tax-free Canadian
trains are driving instead to
avoid the United States tax.