Evening star. [volume] (Washington, D.C.) 1854-1972, 1956-04-19
Income Tax Cut
Urged Now #
Stands
Kerr and Simpson
Air Views; Others
Cite Initiation Effect
BY J. A. O'LEARY


Senator Kerr, Democrat Of
Oklahoma, said today this ses-
sion of Congress should ease the
income tax burden by raising
personal exemption from $500 tt
$700 this year and to $500 next
year if Treasury figures next
month bear out a forecast of 9
50 billion or more surplus.
On the House side, Represent.
alive Simpson, Republican Of
Pennsylvania, of the tax-writine
Ways and Means Committee, ad.
vocated a percentage cut in in.
come tax rates up and dowr
the line if increased collection;
justify it.
These were two of the first
reactions to a report by the staff
of the Joint House Senate Eco.
nomic Committee, estimating
that Treasury receipts are run.
ing about SO billion ahead o.
January estimates.
Advise Against Cuts
But there were others in botf
Houses including Senator Doug,
las, Democrat of Illinois. whit
agreed with the staff report thai
immediate tax cuts would be un,
wise on the basis of curren'
revenue estimates because O.
their inflationary effect. Sena.
tor Douglas is chairman of thu
Joint Economic Committee.
After allowing for increased
expenditures since January, tn,
experts figured the increased
collections would mean an ad.
ministrative surplus of about S.
billion, and a cash surplus O
perhaps 81 billion on June 80.
For the fiscal year 1857 tn,
experts thought the surplus alst
would be larger than last Jan.
uary's estimate unless bushes.
conditions go down or Congress,
increases spending significantly.
(The 81 billion cash surplus
figure includes Social Security
and other trust fund collec-
] lions. Students of taxation dis
agree on whether these COL
lections should be counted in
determining the feasibility of
a tax cut, and it is probable
Congress would decide the
( question on the basis of the
! unencumbered So billion bal
ance.)
Increases Figured in
The significance of the report
lies in the fact that the Essen.
hover Administration estimated
in January it would have a bal.
ance of only $3.50 million on this
June 80, and of only about $40C
on June 80, 1857. The 1857 bal
ance also assumed this session Of
Congress- would boost posta
rates by $3.50 million, which il
has not done to date.
! Chairman Byrd of the Senate
Finance Committee said yester.
days optimistic forecast of the
surplus does not coincide with
figures given his committee BY
Treasury officials a few weeks
ago. In any event, Senator
Byrd repeated his opposition tt
any tax cut which would en-
danger the prospect for a bal
anced budget.
Despite the rosy picture
painted by its own estimates, the
Joint Committee staff report
said:
Although long-run projec'
lions indicate the pOSSlDllltleS o.
tax reductions, the emergence al
this time of a surplus. eithel
anticipated or greater than or
iginally anticipated. is not per-
suasive as to the wisdom of tal
reduction in the fact of a boom
ing economy already pressing
the limit of immediate resources
and famed by a variety of up
ward drafts The fact is that TIT
emerging Federal surplus of it.
self is but another indication O.
the strength of the boominI
forces present in the economy"
Several members of the Hous'
and Senate declined to common
until they see the actual Treas
+ Continued on Page ALP, Col.