Evening star., 1955-02-27
Economists Report
Asks $500 Increase
In Tax Exemption
By Froncis P. Douglas

An organization representing
business, labor and agriculture
yesterday recommended tax re-
ductions for individual income
taxpayers which go farther than
the proposed cuts now before
Congress.
The Conference on Economic
Progress urged an increase in
the personal income tax exemp-
tions by 5000, or from $500 to
$500. 1t estimated this would
result in about $4.5 billion more
for consumers to spend and
would be a powerful stimulus
to the whole economy"
The tax bill which was passed
by the House Friday and is now
before the Senate provides a $40
tax cut for every taxpayer and
each of his dependents. This has
been estimated to amount to
between $2.1 and $2.3 billion for
whole year.
Balancing of the Economy.
The conference, in a report,
also recommended that balanc-
ing of the economy take prece-
dence over balancing of the
budget. The deficit between what
the economy produced beginning
with the recession in 1853 and
an economy of full employment
and production. the report said,
amounts to about $50 billion.
This. it was added. is equivalent
to $575 for every family in the
Nation.
The assertion was made that
with full employment and full
production-a balanced economy
achieved by the end of this
year, base would be established
for. even more economic progress
in 1856, resulting in a balanced
budget by the end of that year.
The staff work on the current
report, as on a previous one.
was directed by Leon H. Key
serling. economist and attorney
who was chairman of President
Truman's Council of Economic
Advisers. The report issued last
August also recommended a tax
cut and increased Federal spend
ing to jolt the economy out of
its decline.
Five Million Unemployment.
The current report noted the
upturn in the economy late in
1854. 1t said, however. that ma
tional economic policies seem
geared to the objectives, 'opti-
mistically' described, of advance
ing our total output this year
by only 3 per cent above last
year"
That would mean an unem-
ployment figure of 5 million,
according to the report, which
added: ITO restore full employ
nient and reasonably full pro-
duction by the end of 1865. the
level of total output would need
to reach an annual rate in the
fourth quarter of the year, more
than per cent above the level
in~th fourth quarter of 1854.
For 1855 as a whole, it would
need to be s per cent above
1854 as a whole"
Four Recommendations.
To achieve this, in addition to
the tax cut, the conference rec
commended:
|. Raise the minimum wage
law to $1.25 and expand the
coverage. This might add an
other $2.5 billion to purchasing
power by the end Of the year.
2. Increase Federal spending
by about $35 billion this calen-
dar year above the spending now
contemplated in the budget. This
would still be $675 billion below
the 1853 level and would take
place in an expanded economy.
3. Increase old age insurance
benefits by the fourth quarter of
the year to figure which would
be at an annual rate of 81 billion.
Expand unemployment insur-
ance.
4. Increase the rate of slum
clearance and low-rent housing
to an annual rate Of between
100000 and 100000 units by the
end of the year.