Jackson advocate. [volume] (Jackson, Miss.) 1939-current, 1954-07-10


kinds Of actions which are recon-
mended. The decline in the spend
ing Of business for inventory -
not the decline in the spending Of
consumers for the goods and serv-
ices they helped to produce at an
all-time records the seat Of the
trouble, from the viewpoint Of the
Report.
Apart from whatever caused the
downtrend of economic activity,
the Report makes clear that the
nation is not in the throes of
recession. However, to avoid the
possible effects of psychological
repercussions" stemming from the
current inventory adjustment"
legislative program was cautiously
recommended in the Report-with
the qualification that these meas
ures constitute program of i'm
mediately advisable action and by
no means is the program to be
considered as made up of emery
ency measures, since "the current
situation clearly does not require
one"
What is the legislative program
recommended in the Report? It is
essentially the "bold, dynamic pro-
gram" which the Administration
has laid before Congress. AS the
Presidents messages to Congress
indicate, the program allegedly
includes reforming" the tax struc-
ture, "aids" to housing, laid" to
agriculture, Improvement" of the
social security program and po-
sition on minimum wages. In ad-
dition, Studying" plans for pub
lie works and formulation of pol
icies on economic relations with
other countries are also in this
program.
Save for part of the tax pro-
gram, the status of the program
today is that the Administration
has proposed and the Congress has
not yet disposed. In short, the
limited program so cautiously ad-
vanced by the Administration has
yet to go into action; meanwhile
the contraction" continues and
unemployment grows.
But there is one part of the pro-
gram which is in effect partially;
reform of the tax structure. On
January l personal income taxes
were reduced on an average 10 per
cent and the excess profits tax
was allowed to die. Let us ex-
anime the tax program to detect
the approach of the Administra-
ton in reversing the downtrend.
The proposals on taxation in the
Report are neatly divided into two
major parts. One is defined as
Greater Equity to Consumers"
and the other is headed as en-
couragement of Enterprise and
Tax benefits for consumers in
clude allowances for widows and
widowers who employ assistance
for children at home, for families
whose children earn more than
$500 per year, for relief from
heavy medical expenditure, for en-
ployer contributions to health and |
pension plans, for pensioners, and |
available split-income priv
ileges for heads of households.
Just how much such corrections
IN the tax structure will add to the
consuming power Of the nation is
disclosed by the observation that:
"These faults can be remedied at
4 comparatively small loss of reve-
nue."
On the other hand, the Report
'inds that the present structure of
business income taxation is faulty
since it leaves. too little incentive
'or the assumption of risk by in
yestors and "offers too meager
. reward to enterprisers who as
sumo high risks" This statement
appears to contradict the facts in
he Report describing profits in
95S. Concretely, the Report states:
profits after taxes for the
'irst three quarters of 1853 were,
n terms of seasonaily adjusted an
,ual rates, little over 20 billion
compared with Is 1I2 bill
ion in 1852 as a whole.
1t is quite difficult to accept the
of "meager" rewards
md also the fact that in 1853 prof
is reached an all-time high in
he history of the United States.
Nevertheless, a number of import
mt tax reductions are proposed to
stimulate incentive, Carry-back
privileges on net losses are to be
increased from one to two years:
o-called double taxation" on di-
n