Milford chronicle., 1958-12-12
THE GOVERNMENTS FISCAL
PRORL EN-


AS everyone knows, the dollar has lost
more than half of its purchasing power since
the pre-war era Will your dollar be worth
ten cents?
That question provides the title of an inn
portant article by Roswell Magil in the No
vember % issue of The Saturday Evening
Post. Mr. Magill, lawyer and teacher, was
Under Secretary of the Treasury in 1898,
and now heads the Tax Foundation, Incor-
porated.
In his view: "The United States now pre-
sents the curious spectacle of the richest
country in the world being unwilling to raise
enough money in taxes TO pay its current
governmental costs. He quotes Senator
Byrd as predicting that the way things are
going, the federal debt will reach $3.50 bill
lion in five years. That works out to $6,250
for every family, which actually is more than
average family income.
The problem is what we can do to get the
government back on d sound financial basis.
He observes that "the usual answer Is that
taxes should be raised and Government
spending should be CUT But, as he goes on
to show we are near the ent of the road when
it comes to tax increases. According to a
Tax Foundation breakdown, the average
$4,500-a-year man spends more working
time to pay taxes than for any major item
of living expense-more than for his food
his housing, his clothing, or anything else.
On the basis of an eight-hour day. taxes alone
account for 2 hours and 20 minutes-not far
from. a third of, total working time.
So, obviously, the solution must be found
elsewhere And there is plenty of room for
economy in government operations, as Mr..
Magill sees it. He points out that, even though
defense items account for the largest part of
government spending by far, the biggest in
crease has been In nOn-denfense spending.
This has risen by $12.5 billion since 1854.
And the largest increase for any single item
in this category has been in the farm pros
grams, whose costs rose almost $3.8 billion
in five years and now amount to S.65 billion
a year.
The federal highway program is another
example-it cost S586 million in fiscal 1854
as against an estimated $2.5 billion this year
That's more than a four-fold jump. Then,
Mr.. Magill says that the 100000 federal
civilian employees are paid substantially
higher salaries than the employees Of either
the states or private industry.
SO it goes. The job we need to face now
he writes, is to distinguish what is essential
from what is desirable" All in all, he Thinks
genuinely economy-minded Congress could
reduce the budget to $40 billion year, which
is nearly $40 billion below the present level
AS an immediate goal, he suggests $75 bill
lion for the fiscal year beginning next July
/.
But government economy, in Mr.. Gagill's
nNind does not tell the whole story by any
means Our tax structure, he is convinced
needs major overhaul. 1t was largely de-
yeloped on hit-and-miss basis. It's hard to
believe-but until mere 45 years ago, when
the income tax came into being, federal tax
revenues all came from taxes on liquor and
tobacco and custom duties.
To quote him again: "It is fair to say that
the Federal tax structure never has been
surveyed and revised in the light of its pow
erful effects, for good or evil, on our econ
omy." Tax laws and policies which would
offer maximum encouragement to investment
and industrial growths; it is obvious, would
bring in increased revenues in the normal
course of events. In other words, to Mr.
MagiIl, the problem lies in devising system
of taxation which will raise the needed mon
ey and do it in manner that will encourage
not depress, the economy.
AS he writes at the end: Surely Ameri-
can intelligence can be mustered to help our
Government build sound fiscal system, to
match a sound economy and sound de-
fense."