Evening star. [volume] (Washington, D.C.) 1854-1972, 1954-02-19
Offers
S4.5 Billion Tax
Relief Plan
Bill Proposes $500
Exemption for 1854,
$1,000 Thereafter
BY J. A. O'LeoN


Senator George. Democrat, Of
Georgia took the lead today in
a move to give individuals about
$4.5 billion of immediate tax re.
lief as the most effective step
that could be taken to head off a
depression.
With Democratic Senators
Kerr of Oklahoma and Frear of
Delaware as co-sponsors, he in
troduced a bill to raise the per-
sonal exemption for taxpayers
and dependents from 5000 to $500
for the 1854 tax year, and to
81 1000 thereafter. The switch to
$500 would cost the Government
an estimated $4.5 billion an
nually.
The venerable Georgian's move
clearly signaled the opening of
major partisan battle in this
session of Congress. Democrats,
almost unanimously. appear to
favor tax relief for individuals as
the most effective way of stimu-
lating the economy. Republic
cans on the other hand, are lined
up equally solidly in favor Of
tax relief for corporations, on
the theory that this will benefit
individuals more greatly in the
long run.
No Prophet of Gloom.
Senator George, a leading au-
thority on taxation, told the
Senate: Il am not an alarmist
nor a prophet of gloom"
He pointed out, however. that
President Eisenhower indicated
at his Wednesday press confer
ence that he has IAN awareness
of an economic situation that
might call for the use of the ex-
traordinary powers vested in the
President"
Senator George said the Presi-
dent mentioned tax relief as one
OF the steps he would take if
unemployment continue to rise.
The Georgia lawmaker recalled
that Colin Clark, Australian
economist, has Indicated: I'VE
are headed for economic trouble
in the United States" Mr.. Clark
said substantial tax reduction
would be needed to avoid a real
depression.
Two Moves Proposed.
Senator George said that there
are two things that should be
done now:
/. Apply these higher exemp-
tons.
?. Reduce or eliminate excise
taxes, which apply to goods and
services.
Those steps will lose some
money" the Senator continued,
but the Treasury also will lose
money if unemployment reaches
(. 5 or 6 million"
Latest reports show there are
now slightly more than 3 mil
lion unemployed at present.
Senator George said tax re-
lief for corporations has some
indirect effect on individuals,
but that the relief he proposes
would increase directly the pur-
chasing power of consumers and
stimulate business.
If we are courageous enough
to take this step before the
economy falls on its face. we
will be doing the American peo-
pie a service"
Move in House Failed.
The Democrats in the House
began advocating similar &C
ton a month ago. But when
on January 81 they proposed the
personal exemption by raised to
$500 they were defeated in the
ways and Means Committee on
a party-line vote.
Under the Constitution. the
Senate may not originate a tax
Dill, but it may add its proposals
to any revenue measure the
House passes. Senator George
and his two co-sponsors are
of the tax writing Sen
ate Finance Committee.
Ironically. meanwhile, some
House members seemed sur
prlsed today by a Ways and
Means Committee lineup show
ing Republican members solidly
against a move to shorten the
capital gains tax holding period.
In an unexpected motion the
Democratic members late yester-
(See TAXES, Page ABB