Editorial
EDITORIAL Consumer Tax Relief The present Administration seems to believe quite deeply that recession can be warded off by corporation tax relief. Reducing big business's tax load, it is argued,...
...has pointed out, the present decrease in consumer demand is in large measure due to the tightening pocketbooks of the millions of families earning less than $5,000 a year...
...Reducing big business's tax load, it is argued, will stimulate corporations to expand production and, thus, employment...
...Thimaya's stand clearly conflicts with that taken by his chief in New Delhi, Indian Prime Minister Nehru, who has insisted that the Armistice Agreement calls for holding the prisoners until their fate is decided by a political conference...
...But bills for such relief have been introduced in both houses of Congress, and they will furnish a crucial test by which to judge those legislators who have been making votes on the cry of "oppressive taxation...
...Perhaps the most important of these factors was the mass consumer demand generated by war and by the redistribution of wealth effected since 1933...
...More likely, GM and corporations like it will prefer to stand still or even retrench during the low-demand period...
...Such a revival of demand would embolden industry to new production as no corporate tax cut ever could...
...A fiscal policy designed to stimulate consumer buying should include (1) raising the minimum taxable income from $600 to at least $1,500...
...Alongside of this consideration, the question of the Federal deficit pales into insignificance...
...2) raising the exemption for each dependent from $600 to at least $1,000, and (3) raising the minimum hourly wage from 75 cents to SI...
...Would such measures deprive the Government of substantial tax revenues...
...As Senator Paul H. Douglas (D.-Ill...
...Of the five members of the Neutral Nations Repatriation Commission, only Sweden and Switzerland are standing fast by the provision in the Armistice Agreement that the 22,000 anti-Communist North Korean and Chinese POWs must be released on expiration of the 90 days allotted for Red "explanations...
...By stimulating consumption, lower-income tax relief would bring added revenues (without raising rates) in corporation and excise taxes...
...The current business problem, essentially, is the slackening of that high demand...
...Will lower taxes alone induce General Motors to expand production when used cars are clogging the market...
...The call for a special UN Assembly session on February 9, just issued from New Delhi by Nehru's sister, Assembly President V. L. Pandit, suggests that the Indian leader is agitated at the prospect of "antagonizing" Moscow and Peking by giving the prisoners their freedom...
...The surest way to forestall this is to free the prisoners right on time—at one minute past midnight, January 23...
...This would pave the way for their prompt release by the UN Command...
...Surely the tremendous expansion of peacetime industry since 1945 would indicate that other factors besides tax incentives were stimulating production...
...What constructive purpose such a session would serve at this time is difficult to fathom in view of the failure to make any progress whatever at Panmunjom toward holding a political conference...
...The Eisenhower legislative program includes tasty references to tax "reform," and specific mention of relief for corporations, widowers, children who work, and convalescents...
...It would seem a far wiser course to grant tax relief to lower- and lower-middle-income taxpayers...
...Czechoslovakia and Poland, of course, favor indefinite detention of the prisoners until such (increasingly unlikely) time as the UN and the Communists reach agreement on the issue...
...But has that point been reached...
...Free the POWs...
...By stimulating business expansion in the only tried and true way (through stimulating consumer demand), such measures would also reverse the cycle of business and consumer retrenchment which now threatens our economy (and also deprives the Government of revenue...
...As the fateful date of January 23 approaches, the picture in Korea grows murkier by the hour...
...If their taxes were reduced, they would hardly hoard their savings, but would immediately use them to buy the better cuts of beef, the automobiles, the TV sets that have had trouble selling during the last year...
...High corporate taxes notwithstanding, business expanded because millions of people wanted, and could afford, to buy business's products...
...Otherwise, we will surrender whatever moral capital we have gained from the three-year struggle in Korea...
...The danger is that the Indian-led neutralist bloc, ardently seconded by the Communist nations, will use the Assembly meeting for 8 new effort to nullify the clear provisions of the Armistice Agreement and condemn the anti-Communist POWs to endless incarceration while the hopeless wrangle resumes...
...It does not propose far-reaching tax relief for lower-income taxpayers...
...We doubt it...
...And this fact casts doubt on the whole theory of pump-priming through corporate tax relief (generally described as "stimulating initiative...
...There is some logic in this view: There is a point at which taxation restricts business expansion...
...Despite denials, Gen...
...Thimaya, the Commission's Indian chairman, who holds the balance of power, is not prepared to set his charges free on January 23...
...He is, however, willing to return them to United Nations control on the ground that his authority over them has run out...
Vol. 37 • January 1954 • No. 3
