Evening star. [volume] (Washington, D.C.) 1854-1972, 1954-03-18
Mixing Politics and Taxes

The Democratic opposition to the admin
istrations omnibus tax reform legislation has
become well organized and highly disciplined
operation. The strategy Is to denounce the
pending measure in broad terms as being de-
signed to help business and the rich, to direct
the sharpest criticism at the proposal for reduc-
ing double taxation on dividends and to con-
centrate support on substitute provision for
increasing personal exemptions.
The big guns" in the Democratic attack
we're wheeled up on Tuesday night when former
Speaker Rayburn was joined by Senator George
of Georgia and Representative Cooper of Tennes-
see In nationally broadcast and televsed assault
upon the legislation. Respected not only as party
spokesman but as the ranking minority experts on
taxation they attacked with dignity-in marked
contrast to the shameful personal attack on
Treasury Secretary Humphrey by Representa-
tive Eberharter-but on the strategic lines noted
above. Mr.. Rayburn denounced the "trickle
down" tax philosophy of the Republicans
relief at the top with only little of 1t eventu-
ally getting down to the majority of taxpayers
Mr.. Cooper concentrated on the dividend tax
relief as giving hundreds of millions of dollars
to the six families out Of every thousand who
are fortunate enough to be shareholders" Sena-
tor George concluded by appealing for broader
relief through the raising of individual exemp-
lions.
It is unfortunate, although not surprising
that the big tax bill should become a political
football. AS the first genuine effort in more
than so years to overhaul the tax structure and
to correct inequities which have been acknowl
edged on both sides of the political aisle. the
legislation is a part of the overall fiscal
planning of the administration. It's purpose is
not to serve as pump printing measure in a
time of slowing economic activity or to hand out
election fqY benefits Tn the largest number
Of voters. In correcting certain tax practices
considered inequitable or harmful it does offer
tax relief, some of it to individuals of all cate
gories and some to business. 1t is estimated,
however, that the revenue losses would be nearly
Offset for the first year at least by keeping the
corporation income tax rate at the present level
Of So per cent.
In his budget message in January, President
Eisenhower allowed for expiration of the excess
profits tax on corporations and reduction of the
q individual income tax rate by about 10 per
cent-both effective at the first of the year. He
likewise proposed the major changes included
In the pending omnibus bill and his budget
estimates were adjusted to all of these recon-
mendations. Congress- despite administration
opposition, now appears on the way to passing
an excise tax reduction measure that would cost
an estimated 1912 million in revenue. II the
reform bill should be amended to provide for the
politically appealing but even more costly in
creases in exemptions the Government would be
plunged much deeper into deficit financing and
closer to the ear-certainty of requiring a
higher ceiling for the national debt. AS Sena-
tor Byrd, Virginia Democrat, warned in an
nouncing his opposition to all tax reductions
unless Offset by curtailments in spending, there
are real perils in such policies Opposing broad
tax cuts in an election year may be politically
unpopular for the G. o. p, but it can be
disastrous to the national welfare to turn this
tax reform legislation into mere vote-getting
instrument.