Evening star. [volume] (Washington, D.C.) 1854-1972, 1954-02-28
Showdown Coming on Taxes

Some very strong forces are coming to
bear upon the question of what kind of tax
legislation is to be passed during the present
session Of Congress
The House Ways and Means Committee has
nearly completed comprehensive overhauling
Of the tax structure. The committee recon-
mendationS, rejecting on the whole an adj
miniStration program for corrections and reform
of long-term merit, are due to be reported to
the House this week. The recommendations
include some provisions for direct relief to in
dividual taxpayers and others for direct relief
to business and industry. It is the administra-
tions philosophy however, and it has been
expressed persuasively on several occasions by
Secretary of the Treasury Humphrey, that the
type of tax relief to business which is being
recommended here will stimulate production
and create bigger payrolls and more and better
jobs" In other words, what Is good for business
is good for the individual citizen, and the ma
tional interest is served by funneling this bene-
fit down through the business structure into the
hands of the employee consumer. 1t is estimated
that the pending recommendations would cost
the TreaSury-or save the taxpayerS-approxi-
mately SIS billion annually.
Two circumstances are serving to divert
attention from the merits of this philosophy.
One is that the current economic readjust-
ment or recession-or whatever one wishes to
call it-has brought demand for quick-acting
tax relief as a pump-priming operation. Al
though the pending measure was not designed
or conceived for that purpose-it is instead
a long-term program for tax reform-proposals
already are being made In both House and
Senate, and by both Republicans and Demo-
Gratis, for greater direct tax relief to individuals
Although the House committee, on a straight
party vote, already has rejected a suggestion
to increase the present exemption from $500
to $70O, Senator George, Democrat, Of Georgia
and former chairman of the Senate Finance
Committee, has proposed an increase this year
to $500 and for next year to $1,000. The argu-
ment made on behalf of this plan is that quick
and direct relief to individuals (consumerS)
would be more stimulating to tagging economy
than the indirect method favored by the ad
miniStration.
While there undoubtedly is an honest diff
ference of opinion on this basic philosophy Of
taxation, the second diverting circumstance may
have even greater bearing on the eventual
decision by Congress. That circumstance is
that 1854 is an election year-with all seats of
the House and one-thrd of those in the Senate
at stake. Tax relief-of the quickest and more
direct kinds an UNDERSTANDABLE popular plat
form for ote-getting purposes.
It would be unfortunate If program for
much needed tax reform should miSflre because
of considerations not really related to such an
objective. If greater tax reduction as an anti
recession measure appears necessary-and
March has been mentioned as the month to
tell the story-President Eisenhower informed
a press conference recently that such reduce
ton probably would be one of the first steps
considered. Secretary Humphrey too, has said
repeatedly that the administration is deter
mined to make tax reductions from time to
time and to return tax money to the people, for
them to spend for themselves rather than have
the Government spend it for Them On the
strength of these pledges it would seem desr-
able for the administrations pending program
to be approved first. Other steps can be con-
Sidered when, as and if necessary.