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16 Tax Review 1 (1955)

handle is hein.tera/tafoutaxt0018 and id is 1 raw text is: TA X REVIEW JANUARY 1955 Vol. XVI, No. 1 '4 o a0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 OO 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 OO0 Copyright 1955, The Tax Foundation, Inc., 30 Rockefoller Plaza, New York 20, N. Y. a0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 000 0 A Look at Our Federal Revenue System Flaw Seen in Dependence on Income Tax As Main Revenue Source by ROSWELL MAGILL, President, The Tax Foundation T AXEs have become the major factor in almost any design for living, whether family or business. The Revenue Act of 1954 did not change the pattern materially, although it did make life for taxpayers a little easier. The general structure of the Federal tax system was not altered at all. The rates were not lowered nor were the exemptions eased a little, and the general climate of the Act was improved. Business was encouraged a little to buy new ma- chinery. Individuals were encouraged a little to buy corporate stock. Corporations can now merge or split up with a little more assurance of the end result. The whole Internal Revenue Code was rewritten, a tre- mendous job that any expert would say was impos- sible. Such an enormous piece of work having been done, citizens, officials, and various governmental bodies' staffs can be pardoned for hoping that they need con- sider no more fiscal problems for a long while. For all their pervasiveness, fiscal problems arouse little warmth of interest. But yet, even had there been no Congressional election, there would have had to be a Technical Changes Act of 1955, to correct some of the errors and to pick up some of the threads left loose by the 1954 revision. During the 1954 election campaign there was strong advocacy of increasing individual income tax exemptions and of eliminating more excise taxes. raised. But the deductions were enlarged and There is still present the issues of whether Federal expenditures can and should be reduced or increased. So long as the Federal budget is a $60 billion affair, revenue and expenditure problems will rank with national defense and foreign affairs in current politi- cal discussions. Revenue System's Main Purpose It may be asked: what are the main purposes of our Federal revenue system anyway? One major purpose, of course, is to raise money, a great deal of money. Many, including myself, believe that if the revenue system does that one job fairly and well, it has accomplished its principal end. Indeed, some of us believe that it is good governmental philosophy not to use the tax system to accomplish ends unre- lated to raising revenue. Another purpose which can be accomplished by a tax system is to redistribute income and wealth somewhat differently than it is distributed in the market place. Taxes levied at uniform rates, i.e., 1 3

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