Evening star., 1954-05-03
$50 Billion Budget
Can Cut Tax Rates,
Fiscal Experts Say
By Robert K. Walsh

A couple of big "ifs" accom-
panied suggestion by the Com
mittee on Federal Tax Policy
today that taxes might safely be
cut on individual and corpora
ton incomes.
"If budget expenditures can be
brought down to $50 billion and
if a uniform manufactures ex-
else tax is levied at rates ranging
from S to 8 per cent, further in
dividual income tax relief can be
granted and a somewhat lower
corporate tax rate is possible"
the committee reported.
The committee, a private
group Of fiscal experts headed by
Roswell Magill, former Under
secretary of the Treasury, pre-
sented its views on taxes as the
final part of a study of Federal
finances. In a previous report
April IL it recommended ways of
cutting non-defenSe budget
items by So billion during the
fiscal year beginning July /.
Oppose Higher Exemptions.
In its tax policy recommen-
dations it opposed an increase in
personal income tax exemptions.
Instead, it declared that any
further cuts in individual income
taxes should be in the form of
fiat percentage reductions.
Democrats in Congress have
favored boosting personal exemp-
tionS. The omnibus tax revision
bill passed by the House several
weeks ago is expected to be re-
ported out by the Senate Finance
Committee late this month.
Senator George, Democrat of
Georgia, and several other Demo-
Gratis said they would try to
amend it by providing for an in
crease from the present 5000 to
$500 in exemptions. A House
Democratic drive to increase the
level to $700 last by a close vote.
Sales Tax Seen Unlikely.
The manufacturers sales tax
proposed by the Committee on
Federal Tax Policy has been
given little chance of adoption
in Congress. Many Republicans
as we'll as most Democrats op-
pose it. The tax. as outlined by
the committee, would apply to
all articles except food and medi-
cine.
The report today cautioned
Congress against rushing
through the big tax bill before
all it's details are perfected"
In general, the report indorsed
the bill as containing many
"highly desirable and long-over-
due" changes.
In spelling out it's ideas about
possible income tax reduction if
the Federal budget can be bal
anced. the committee stated:
"As soon as the budgetary
situation will permit, tax relief
for the individual should be
granted through further per-
centage reductions of taxes. the
initial goal being a return to the
average level of the 1948 income
rates. Thereafter, the goal
should be a new scale starting
at the lowest rate consistent
with reasonable revenue needs
and rising to q maximum rate
of so per cent"
Aim Of SIS Billion Budget.
The committee added that if a
$55 billion budget could be
achieved in the next few years,
along with a manufacturers
excise tax, Congress could give
additional tax relief on a still
broader scale.
The committee explained that
this could result in income tax
rates of from Is to so per cent
on individual incomes and cor
poration tax rate of AZ per cent.
The tax revision bill pending in
the Senate would continue cor
poration income tax rates at So
per cent for another year. In
dividual income tax rates range
from about 20 per cent to well
over IS per cent in the highest
brackets.