Evening star., 1955-02-24
Eisenhower Text Telling Why He Opposes Tax Cut

Following are the highlights
of President EisenhoDer's COM
ments at his press conference
yesterday on, the House Demo-
cratic proposal for $40 re-
duction for eDery income tar
payer:
@. Robert E. Clark, Interna-
tional News Service.-Mr. Pres
ident. can you tell us how
you feel about the Democratic
proposal to cut everybody's taxes
by $40?
The President-The question
affects this proposal for cutting
the income taxes of every in
dividual in the United States $40.
You have asked a question. Mr..
Clark. that takes some time to
answer. because you asked for
my opinion about it.
Now, in the first place, any
proposal to reduce taxes is, Of
course. popular, and at first
glance this is kind of proposal
that should make an appeal to
low income brackets. Let's take
a little closer look at this pro-
posal and start of with this one
observation.
Whenever you have imitation,
the immediate effect. of course.
is to hurt first the people of
fixed incomes. white collar work.
ers and others who for the
moment at least are on relatively
fixed incomes; but in the long
run, the person that is hurt most
is the person who lays aside
savings in the forms of pensions,
insurance plans. and savings
bonds for use in his older age.
Pensioners Hart Hit.
For example, anybody who
paid up all of his share Of a
pension by as early as 1899 was
getting in 1858 half of the worth
of the dollars. the worth of the
pension plan he had bought.
Now. when we talk about de-
creasing revenues at a time when
the Government, in spite of every
saving we have been, able to
make, is still spending somewhat
more than it takes in, we are
reaching some kind of heights
In fiscal irresponsibility, and be-
cause this does have on the sur
face popular or appealing ap-
pearance. these people appar-
entity hope it may be passed.
They have not had the courage
to put it in as a bill on its own
merits. They have attached it
as an amendment to a bill which |
is for the continuation of the So
per cent as opposed to the At per !
cent taxes on corporations and !
for the continuation of excise
taxes on liquor, tobacco, gasoline,
automobiles, transportation, and
the like.
From those two bills, those two
combinations of tax programs,
We expect and anticipate getting t
s2.8 billion. roughly that kind
If money. This $40 exemption
would in the first full year Of its
operation reduce our income $2.3
billion. /
Deficit Cut.
Now. we inherited in 1853 a
budget that contemplated a
500 billion deficit in Federal
financing. BY hard work-and
assure you it is hard work
when you realize that every bu-
reau of Government feels it
should have more money-we
have reduced that to an ex-
pected deficit in 1856 of some
less than $2.5 billion or in that
neighborhood, estimated.
Now we are going back to
deficit spending. the most in
sidious thing that can happen
to a free economy. and particu-
arly in its bad effect upon low
income groups. I should like to
,all your attention to a state
nent by economists of the
Federation of Labor,
which said. the year 1854 was
heir finest overall salary year
If their history. In spite of the
act that their salary increases
we're only S to 8 cents, or
something of that order, in gen.
sral insignificant or small as
compared to salary increases of
he past. their purchasing power,
lue to the stability of the dollar,
heir overall position in the
alary angle was the best of
heir history. VI