Evening star. [volume] (Washington, D.C.) 1854-1972, 1963-09-08
BY ADREN COOPER
And EDMOND LIE BRETON

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If Congress doesn't finish
work on the tax bill this year,
the average American can for
get about bigger take-home
pay until well into the spring,
Secretary of the Treasury Dill
lon said yesterday.
But Mr.. Dillon said, In an
exclusive interview with the
Associated Press, he is opti-
mistic about the chances of
enacting the proposed $1l bill
lion, two-stage cut in time to
allow reduced withholding from
pay envelopes to begin in
January.
He predicted stronger public
pressure on the Senate, where
delays are most likely, than on
the House. The House Is ex-
pected to vote on taxes this
month.
Secretary Dillon said also he
sees no need for President
Kennedy to shelve some Of his
domestic programs, as some
Republicans have suggested, to
encourage economy minded
legislators to vote for tax re-
duction.
Economy Needs Tonic
Moreover, Mr.. Dillon con-
tended, there is growing reali-
cation that the American econ
omy needs the tonic Of a tax
cut II 1t is to recover from its
persistent gold and dollar
drain Ills.
Highlights Of the interview:
@. Are you still optimistic
about the chances Of the tax
bill even though the Senate
has scheduled 1t behind civil
rights legislation?
A. I don't think there has
been any definite decision on a
time schedule for civil rights
legislation. The key problem is
whether we can get Senate
hearings on the tax bill before
the Senate gets involved in a
filibuster which would shut off
time for such hearings. I think
there is still an opportunity
for that.
@. If the bill isn't finished
until next year, even though
retroactive to January, would
this do much damage from
your point Of view?
A. 1t would slow up the
economy because the first eff
feet on the economy-as far as
individual reductions are con-
cerned-takes place when the
new withholding rates go into
effect. This increases the take
home pay of everybody in the
United States and If a tax bill
is passed by the Senate, say the
first of March, retroactive to
the first of the year, new with
holding rates probably couldn't
60 into effect until the first of
April, and we would have lost
three months.
Would Increase Refunds
There would Just be larger
refunds taking place in the
spring Of '65 rather than hav-
ing increased pay checks in the
early months Of "a.
Business taxes are paid on
the basis Of the full years
earnings, and they don't start
coming in in any volume until
the following September, so the
effect on business incentives,
to invest or anything else, will
be about the same.
It will be the delay of the
tax cut for the individuals
which will slow the pickup in
demand that is so important.
I can't see anything that can
be done to take the place of
the tax cut in that area. If
1t is late, 1t is just late and we
will lose three months.
@. Don't you think some Of
the effect Of the tax cut is
already being felt as business
men invest in anticipating the
tax cut?
A. I think businessmen do
anticipate the effect Of the tax
cut, therefore, 1t is very i'm
portant that it go through. I
think there would be very Sc
rious disappointment now at
this late date II there turned
out to be no tax cut, or an
inadequate tax cut.
Deficit for 1860
@. President Kennedy said
he expects to submit a budget
for 1865 in which there would
be less than the $9.2 billion
deficit anticipated for 1864.
Are you far enough along to
figure out how much less2
A. No. He is In the position
Just to state that it will be
less than the $9.2 billion which
was the latest estimate-quite
a rough estimate.
q. Mr.. Secretary. some crit
les have said that the Treas
ury misjudged foreign reaction
to the proposed interest equali-