| Transcript |
——
sssssssmsmstmm
The recommendations should effect and expedite the
return to the Treasury of more than $10 billion through
recovered investment, elimination of unnecessary liabilities, liquidations, and realizations of surplus property
assets. In any event, the Commission affirms that there are
enough possible savings to enable the balancing of the
budget and the reduction of taxes.
Effect on Individual Taxpayers: What would the saving
of $7.5 billion mean to you?
The Hoover Commission takes no stand on how tbe
savings should be applied. Here are possibilities being
discussed in Congress:
The simplest tax cut for Congress to make would be a
straight across-the-board cut to all individual taxpayers.
Since the federal revenue from individual income taxes
is $30 billion a year, a $7.5 billion cut would mean a
reduction of 25 per cent in the personal income tax of
every taxpayer.
Among alternative tax cuts, several of which can be
combined to equal $7.5 billion, are the following:
An increase to $700 in the present $600 personal exemption would cost $2.3 billion.
If the $600 exemption should be raised to $800, the cost
would be $4.5 billion.
Let's look at a different type of reduction.
If the top income tax rate for all individuals should beset at 35 per cent, the cut would cost $2.4 billion a year.
If the top rate were set at 40 per cent, the cut would
cost $1.9 billion. If the top rate were set at 50 per cent, the
cut would cost $1.1 billion. If at 60 per cent, the cut
would cost only $600 million.
When we realize that the total federal tax collections
from all sources in 1954 were $70 billion, it is amazing
to learn that the total amount collected from individuals
whose rates are above 35 per cent was only $2.4 billion
— a mere 3.4 per cent of the grand total.
The shock is due to the extraordinary success of the
Communist propaganda — repeated so often that millions
now believe it — that 1 per cent (or 3 or 5 per cent) of
the people own 90 (or 95) per cent of the nation's wealth.
The conclusion follows — if you believe the Communist-
inspired propaganda — that with a sharply ascending progressive income tax, all little people should favor every
federal expenditure: They would not pay for it anyway.
Government spending would not be at the expense of the
little fellows, but only of the Big Boys.
That conclusion is built upon a false premise. The truth
is, the Federal Reserve Board's Survey of Consumer
Finances shows that, in 1954, families with incomes of
$10,000 or over received about 20 per cent of the total
income of all families. If all the taxable income in excess
of $10,000 could be totally confiscated by the government,
it would pay the costs of government for only four weeks;
and, of course, the income to be confiscated would quickly
vanish, once taxpayers were convinced that there would
be no benefit to them from the production of income.
The present top income tax rate is 91 per cent. The
small portion of the revenues obtained by the rates above
the 35 per cent figure makes it clear that the higher rates
have a punitive rather than a productive purpose. Moreover, since the excessive rates sharply diminish the incentive to take risks, they punish all the people, not merely
the rich. In fact, they probably punish the poor much more
than the rich (who can still live well), because the poor
gain most proportionately from the higher standard of
Page 38
living and the better-paying jobs created by costly moder
production facilities.
The National Association of Manufacturers has sent t
Congress a proposal under which the corporation rates, i
well as the individual rates, would be gradually reduce
over a five-year period to a top rate of 35 per cent. Th
Association proposes a uniform cut in the progressive rati
so that lower-income taxpayers would share in the redu'
tion. The NAM plan is not premised upon any savin]
from the Hoover recommendations; it is based exclusive
upon the increased tax revenues expected to flow auW
matically from the growth of the economy. Assuming
continuation of the normal 3 per cent a year growth, NAl
says that annual tax revenues from sources other than tl
rates above 35 per cent will grow by $12 billion in fiv
years, while the cut in federal revenue from a 35 per ce>
top rate would be $10 billion.
If the NAM plan should be adopted, the Hoover savin
can be applied elsewhere.
Advice to You as a Taxpayer: liuilcl grass-roots sea
ment by sending copies of How to Save $7.5 Billion '
the influential leaders, and groups in your commuiul
such as libraries (city, high school, college), princip
and social-science teachers in your schools, the publish*
editor, and editorial writers of your local newspaper, "*
social-science professors in your local college or your o*
Alma Mater, all members of the Chamber of Cummer1
and Junior Chamber of Commerce. (Note: The initio"
Junior Chamber of Commerce made the earlier Hocr**
reorganization program its national project.) Don't f"
get the members and leaders in service clubs, incluu]
the civic-minded women's clubs; trade union leaders; $1
business friends throughout the nation.
Ask local organizations to pass resolutions addressed
your Congressman, Senators, and the White House,
write to them yourself." Promote active discussion in y*
clubs. Schedule panel discussions on your local rifl
station.
t
*H/
Even more important than first letters, is the follow"1
to your Congressman, Senators, and the White- Hi'"1
Fncourage delegations to call on your representative^
Washington, or at their homes w hen thev return. Do >"J
part toward achieving adoption of the Hoover progfj
i
°On I'aerr 1] may he tonne] a miniature congressional directory wW**
.eld \<in in following Vie. Hanighen's suggestions, Editor
ir The
t0»si8tH
BNrator
""l See,
^nt, H
Co«spir*
to Sul'
"Wo,, i
S a 1,
availal,I,
A constitution is the property of a notion, am! not
of those who exercise the government, ill the const''
lotions of America (state constitutions) are declared
to he established on the authority of the people,
— Thomas PainF-
He who known only his own side of the case, knot"*
tittle of that. His reasons may he good, and no o"f
may have heen ahte to refute them. Itnt if he in cqualh
unable to refute the reasons on the opposite side; ''
fie tloes not so much as know tvhat they are. he I'"*
no ground for preferring either opinion.
— John Stuart Mi*-*'
To speculate without FACTS is to attempt to enW*
a house of which one has not the key, hy wantler'n'"
aimlessly around and arouiul. searching the wall «"'
now and then peeping through the windows.
, — JLI.IAN HUXL*1
Facts Forum News, May*
COM:
tho
Sun
Jvotin
%l
«ady d
"* dis;i
Each P
it*
n rr,(
;:>-v
<:;y
IS I-'<„
|
