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19 Tax Foundation's Tax Review 1 (1958)

handle is hein.tera/tafoutaxt0021 and id is 1 raw text is: TAX FOUNDATION'S JANUARY 1958, Vol. XIX No. I J i, Fundamentals oJ Federal Taxation By Roswell Magill Chairman, Tax Foundalion, Inc. T HE first Federal budget after the Sputnik offers Congress two unpleasant choices: either to invite renewed inflation by piling up additional national debt; or to increase taxes. Congress has so far greeted the request for an increase in the statutory debt limit to $280 billion with tolerant resignation. At the moment, it appears that we shall resort once again to deficit spending as the easiest way to avoid coming to grips with, and so perhaps solving, our fundamental fiscal problems. Congress could avoid both diflicult choices by cutting less essential spending from the budget. The latter route, of course, is strewn with political ob- stacles in an election year. Many members of both Houses are already unhappy cutbacks in domestic spend- ing proposed by the President for fiscal 1959. If defense spending for mis- siles and other strange new weapons exceeds current es- timates, as such spending has a tendency to do, we shall be looking for more revenue to finance defense. In such circumstances, what is likely to happen in the Congress is what has gen- erally happened over the past 25 years. Our Federal tax system today is the product of a series of emergency ac- tions by Congress, first to meet the depression of the 30s, then to meet the needs of about the very mild World War II and the Korean War. There has been no thorough-going Congressional review and appraisal of the tax system as a whole in the light of recognized standards for many years. The Committee on Ways and Means has just elected a new chairman. with unusually broad ex- perience in fiscal aflairs. The committee has a moun- tain of legislation pending before it: a technical changes act, an excise tax revision bill, a general reve- nue revision bill. It is cur- rently engaged in extensive hearings on the inequities and failings of the income tax law. When the hearings are over, the committee will have the material to enable it to consider and determine whether our tax system is helping or hindering the great struggle in which we as a nation are now engaged. If the committee were to un- dertake such a study, what course should its investigation take? What should be the principal fundamental ques- tions for consideration? Three criteria of a well- designed tax system, honored Copyright 1958 bY Tax FoundaItion, Inc., 30 Rockefeller Phaza, New YinA .0, A'. Y. Alaterial naY be re-used it proper credit. This Issue in Brief Adding putches - iore revisions - it) the nation's tax structure won't lit-Ip it raise the kind of revenue that the ttissile. jet age d111u1141s, says IIswell Magill inl this Iteriew. What is really n-e4edd, 114 says, is ia tIllorough-ging revision o(f the existing St4m11. The lchaniges should Ie! nu111de in the interest of fairniess, adtleqluacy and cer- tainty, faetors now obviously lacking in the structure. lr.. 111gill suggests that I 1m11ateri llnow being galthered Ily the Houise4 Ways and Meanus Coruiltve COUld he uised ats at 1111sis for such revision. Mere technielI revision of the tIx strue- 111'e, he4' satys, will not solve the probicil's pose-d, an4d ie- urges that Congress giv' cousideration nlow to at complete overl-3. I

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