St. Paul recorder., 1963-01-24
The Presidents Tax
Proposals Don't Make
Sense To Us

There are in general two theories about how to
manage the economy to insure its operation at a
level to provide full employment and meet the needs
of the people.
There those who say prime the pump; en-
courage investment in new plants, new machines,
products and this will provide the needed en-
ployment. On the other hand there are those who
say, stimulate consumption" get purchasing power
to the consumers and consumer demand will start
the machines rolling and call people back to work.
In between, there those who recognize that
both things important. The Importance of the
one measure or the other depends upon circumstan-
The circumstances of today suggest that the
important factor is the need for more purchasing
power; consumer demand Indeed of the
problems today is the large amount Of unempoy-
ment resulting from heavy investment in automa-
ton. The automaton ranges from automatic harv-
esting machines dispacing the field hands who are
from the lowest economic group in the country to
computer that will set linotype composition in about
10 minutes equal to a days work by highly skilled
compositor Thus investment is putting people out of
work at frightening pace.
The Presidents proposed tax reduction is heav-
lily weighted on the side of investments and the in
vestor group in our economy. 1t proposes, for ex-
ample reduction of $1O4 in the taxes of single
person earning $4,000 year, and 1924 for per-
son with an income of 5000 This leaves the man
in the lower category with $22350 a month after
paying $318, or S2650 month taxes. 1t leaves the
upper-bracket man with $1,24267 a month. You
know that the $223-a-month man is going to spend
all Of his available income, mostly on bare neces-
stiles You can be pretty sure that the $12OO-a-
month man already has heavy savings and in
vestment program and that he is going to increase
this by about the amount of his tax savings
You also know that his investments are going
to go into the industries that most spectaculary
successful, like the computer industry that Is be-
ginning to displace typesetters in wholesale num-
bers, the industries that developing mechani-
cal hands for harvesting apples oranges, grapefruit
nuts, and other crops that have tradtionally frn-
ished a meager living to the lowly migratory agt-
cultural workers.
II the Administration has tried to make sense
out of its tax proposals. its efforts have escaped
We have heard many incantations about the magic
effects which such cut will have, but have seen
convincing figures or arguments.
Associated Press estimates that a family Of
four in the 900 earning bracket viii stin have
$42 bill after reduction Of 80 per cent We submit
that $42 tax on $3,0 900 income supporting fam
lily Of four people is scandaous under todays econ
omic conditions Not only Is the income incapable OF
providing what we consider an American standard
of living but the Is usually among the most
insecure, economically, in our work force.
On the other hand, the $4,000 family Of four
will get 2o.4% tax cut amounting to $842. The
saving to the highbracket family Is almost 80 per
cent Of the total net income Of the low-bracl1et
family 1t is almost so times the dollar reduction on
the 50, 900 income
The government cannot, Of course step In and
arbitrarily adjust incomes (though 1t can take
to stimulate higher earnings in the lower
brackets). But surely it should not manipulate the
tax rates to increase the disparity between the high
est and the lowest economic groups.
This simply does not make sense to US.