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![handle is hein.tera/tafoutaxt0035 and id is 1 raw text is: Tax Review JANUARY, 1971
] Vol. XXXII, No. 1
Needed: A Three-Phased Balance
In Our Tax Structure
By Hon. Wallace F. Bennett
United States Senator from Utah
There are three central problems of tax and fiscal
policy with which we must all be concerned. The
first is how to restore approximate balance in the
budget. We must bring an end to the large budget-
ary deficits that plagued us for four decades, and
have been the chief cause of the inflation that works
so much hardship on our people and disrupts our
economy. In addition it indirectly causes the high
interest rates that have placed such great burdens
on business and individuals, particularly those per-
sons who must finance that purchase of a new home.
The second and newer problem grows out of the
role that our tax structure can play in improving our
balance-of-payments problems. As we all know, our
balance-of-payments picture in the past decade or
so has not been good. Since 1950, our cumulative
deficit in the balance of payments has climbed to
$45 billion, while our short-term liabilities have in-
creased from $8 billion to $42 billion. In the same
period, our gold stock has dropped from $24 billion
to $11 billion. Indeed, had it not been for the Two-
Tier Gold System and the agreement among the Big
Ten to establish special drawing rights at the Inter-
national Monetary Fund, our gold balance would be
even lower than it is today. As a result, we are now
at a point where remedial action must be taken. If
we cannot soon give our exporters an even break in
competing in foreign markets, we may be forced
with the realization that our balance-of-payments
problems can only be solved through the final unde-
sirable resort to devaluation, which in itself would
create a myriad of serious problems in world trade
and world economics.
The third broad problem is the ever-present
challenge to us to keep revising our tax structure
with the changing times, to make it more fair and
more responsive to our continuing economic needs
and goals. We want a dynamic and growing econ-
omy-an economy which encourages American in-
dustry to expand its output and which provides jobs
enough to maintain an attainable maximum employ-
ment level and at the same time insure constantly
This Issue in Brief
In this Review, Sen. Bennett stresses the
long-range need for a three-phased balance
in the nation's tax structure: a balanced
budget; a sound balance of payments posi-
tion, and an equitable balance of the tax
burden.
Alluding to possible tax reform measures
before the new Congress, Sen. Bennett says
he regrets that economic results cannot be
predicted, or Congressional success promised
in solving our tax problems. Then he adds:
When America really wants budgets balanced
and inflation stopped . . . and wants to move
toward equity and balance in our tax system,
it can have it and quick. But so long as every
group seeks its own advantage first, politi-
cians will respond, and we will be able to do
little more than to tinker and fumble with the
tax laws.
Copyright 1971 by Tax Foundation, Inc., 50 Rockefeller Plaza, New York, N.Y. 10020, Judson 2-0880
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