HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.
![handle is hein.tera/taxfeaturs0002 and id is 1 raw text is: 13th National Tax Conference Issue
TAX FOUNDATION'S
MONTHLY TAx FEATuREs
January 1959
Volume 2, Number I
Copyright 1958 by Tax Foundation, Inc., 30 Rockefeller Plaza, New York 20, N. Y. Material may be used with proper credit, without specific request.
Tax Revision
Now A'Must',
Says Magill
%\ Illa fll revision of the Fell.
elci taix sseirI ill (lie interest
011 fail iicss, alequacy and sin.
klit-liv was tiade by Roswell
Ngi.l ( hairlnian of 'ax Fouli.
dith aloi.llai ottilieat tie
( :liluitltil i dai 'l
(:otifeici(1
,%'e iiiI, lie aid, id wlk
(1111 SoIe i%)NIeiU or olgaluilatiOll
whily IhlP govvillolllIt is plo.
vi it( with r etly tilge revellt.e
uit : the saite tlittee lite dki
sioll Iol Ihv lit:lia1:1 itiltOlall e.
lweeil the a','elll11ellt alud the
iilivithii iltist lie such that
the indi idlial hias enough left
Ii, ;, Cltt1lta1ed to ierfurin to
lhe best I is capat-it).
lie asserted
thit tile budget
for ite n ext few
years sihauld be
-in austerity
i uget. We
ugh t to trim
9ii tie fat front it
I I I because cer-
tainly, with : bltidget of the di.
niensions seltidi we cotlfront, ve
atint alroid lavish expeili.
tiCs for od1ds andCl eIt(Is til ih
niay lie diltsrablle and ustelti,
ut whit It tio not really further
fhe gencral purpose which we
ha:%ve or adequtately Inainitainiong
Ii oimnpetitive struggle [with
lie Rusians] for the mids or
niltel.
I lie iix stiicture, lie said,
i1n1itt be as simple as possilble: It
ilst lie adetiuale: it ioust be
fair.
If %oi take these guide-
Pills, lit' eI-lit oil, if yout ap.
1 0). auil thciln to flie s iuation
iII Whic we low are, )oii will
se' Ihal t un lax S)steln is close
io ;lillte liil ally one of these
si 'lics.
litv said lie thought tile tax
s!'Cltl the nation wtlIlts is a
ssteu whlich is btetter diversi.
feti tliill the itie that we have
nioc and which fdoes ot lay the
elliiiititiUs weight Oil the inicoiue
tax .1.. lit which will make use
oF itltr tauxes so far as that caii
As altcintives to a thor.
ougli goiltg revision of tie tax
s)slei, le rited (le dangerous
iissiliilil of a liew excess
X or he adoptuioni of i
Fw oris , special provisions so
tII a lparticular [tax) discrini.
ua;tioi cii he clintilinated by
tilnpliimg a special rexeption.
Revenue Drop
Poses Threat,
Mills Asserts
Slritlkitg estilates of the
site ol i-rtlItial inudget receipts
- iwitliit I liilil little m- may
lilt'sage fi%(tal tliliculties 1to rthe
n~atiolal govern.
c al 1958 ends,
Re. Wit Imir D.
11ils of Arkan
sas. Chairnman,
I louse Waysaud
Aleaits Commit.
tee, indicated in
;ftadi,s hi'ore file llh -in-
it is nmy feeling thal, ciuring
Ite iaihhig period for sustan-
tial relief hi the total lix take,
we shothl in sooe wa'y reihce
tie high pliitivc sitllx rites,
ecause I lIelieve we cal prtve
thit that is IIot a revenue mnatter
in a broal sense. N Furetoaer, we
sholdd iprove the tax fsric-
lure iil other tways where it cali
lie loItCist0cate(i that eveutie
is itr iinsortaotly lliVolsed. -
(;'u. S. Ko h. Paiiel Chairmlan,
Maiager., ax I )elilirtult,
Stiiidari Oil (N..I-)
-h' In m i/jll fatl gaveil fing
the dep)necialiau rateatlmloderil
indu.it iial equipinieit is ohioes.
fence. Alnt sroduclive equip-
teill in ie Present.day mill,
lactoiy or refinery beconces ob.
solete be/ore it rocars out. The
life of ina'iietl Ioday is deter.
iined by I/e Iace of lerhuotng-
ieal pogiess ad oit bly lie
letigth of time it thes to tire
oult a piee of itan, nor 1) tihe
life historuies of the past, when
technological inlprovelnents
aid advances ter' at a ,tliue/h
slower pace. It is expected that
governml1enct officials will begin
to realize this fact They are not
as yet giving due emphasis to
this in their decisions. r - F. 1'.
Olds, Ass't Comiptroller, Chrys.
ler Corporation.
Flexibility I regard lis
tite ils imuiportat fetlucre in Ii
sound systeii of lepreclatiui.
Whether deprecilatio is a cost
or eliether it is adeduction froi
selling price, it is important
that it lie a recovery and not I
statistical increase in lo.s whiclh
ttay ntever lie recovered ...
IF the present Iciror about
d reiiatiln produces no other
Ietel.l it has at least made
misaly leoile realize that depre.
ciition is a I living tlllug and is
not nMereh, ain accoiintiiig plo-
ration. 1t is a part of tie life
loocl if iiilllistry - lhal is, tIte
ioiyica, floeiig inlto and out ea
the biiusliess - and should lie
aialyzed as tie eIA aid flood,
with all their varialtios. - ,V.
L. I leartie, Tax Supervisor. U.S.
Steel Corporation.
I believe, first, that the
United States should follow
Euglantd's lead and Permit U.S.
taxes ot foreign income to be
deferred untillhe income is re-
turned to the U. S. I believe that
fal Tax Conference sponsored
Iiy Tax Foundaltion, Inc.
Speaking at the luncleoni
sessions attended by 200 tax ex-
perts and advisers of tie na-
tion's iiiistries, the Cotgress.
111:111 said:
The inidyear bidget revies
for 1958, released October I,
showed an estimate of total re-
ceipts of $7312 billion, total ex.
penditures of $72 billiou, anti a
surplus of $1 V billioi.
But thne estimates assued
that military spendihg Iy the
Deparlnti of I)cfeise would
not exrcel $38 billion in fite
current fiscal year, and, is we
all knowe, this estintalte is prohe
ably albout $1 bitllio too low.'
[Defense esthnates tade since
NJr. hills' lddress ilicate tlial
.t least i billion more will lie
spent in fiscal 195R.-Ed.]
it addiltioi, hir. Mills
stated, it is qite likely that
the cnid-year review esitisates
of receipts nay lie on the high
aurh a deferral makes ood but.
itess sense, anid shoidd nat be
limited only to those foreignt
blctiesses thich ihe adoiai .
tratioi wishes to encourage; it
s/ould be over-all . . .
Secondly, I believe thit the
U. S. tax rates 1o fnreigit it.'
collies ,hmitiild be io nociel. Thi
wauld F pi . S. busliness piera.
ifig a inroad tto a tiome rqiial
competitive posilion witll ar-
eigap bitsiur. - R{. R{. oigenl.
.tei, iead. Tax DeParulettt,
Sears, Roebiuck I Cocpaty.
When you consider that $80
billion is collected today front
tax socrces, certailly that repre-
seas a terrific responsibility of
tax adiniistration. I tlink that
industry wuuld like thEc Federal
anid state goveininents to appre.
ciate ihat we know that they
have that problem, and that we
are Iooking to them to take
steps to chaige that approach,
so that we, in turt, c n sIeci il
our own tax adosnitratin.
Our own taxes are being re-
carded, aid it cots yo1 six per-
ccti iiterest every lbie you
cli't resolve a iroblem. That
slhouiln't be required. -Paul
W. Simitli, Niaunager, Tax De.
Iaitieuit, Uiion Carbide and
Carbon Corp.
The ight [it: the cmatitig
session of Con gress] is not goin;
to comne over do.ar expend.
lures. i 6c g,;oi_ to came over
aiuthiorizatiota. Mr. Mills was
I00 percent correct in hls analy.
sis of file possibility of increas.
lng expend/itures during 1958.
)'oi cai adopt all the programs
that eneryote is suggesting, in.
eluding atoltic energy, more
tin1y, iiore army, more anna.
tietti, muore missiles, morel
plances, and iteiy few additional
dllars cal go out of the Treas.
utry belteen 1ulo and the first
of next lculy.
The scrap is going to come
over obligatios authorizing the
administration to iake coincit.
iliets in advtance. 'our dollar
stress is coming in 1960, 1961,
1962, 1963. If toe nre not iter-
ested in tat, our children are,
I am sure. So I think we prob.
ably angIt to be interested tntil
they tahe over. - E. C. A/luoud,
Foundation tratee, discussiinI
.mnin iarizer ascd iten ber, Wash. I
iigoi lati fitni, ,lvord and I
.1 httord.
Sherfy Speaker
Ralphael Sherfy, associate
head of the ,egal Departneat,
U. S. Treasuiry Departmient, tlis-
cussed the background of tite
T1'ecthnical Aimieliiectis Act of
1957 aui cicild sone of tle pro.
visioins of [ie 81 sections of the
Act ils sn address before Tax
Founlaton's Itll antual Tax
SiFereu.e.
The still of tie Jiut Coin.
inittee otl Ituernal Reveue
Taxation, ott November 27.
list, infortally estimated re.
ceipas for fiscal 1958 at $1.3 bii
iot less, or $72.2 billioti.
Even ignoring the probabil.
it)y that exsetlditures may ielI
exceed cite Octolber estimates,
iherefore, it.- actual bidget re.
sutls for l'scal 1158 itay well ihe
to surpls at :11h, ;uld the pros.
pect ora deficit can not lie rulccd
out of cousideration,
Tar PrnI/ms- Tm Bus.nes View
Roswell Magill, I'esihlt of
Tax Foluiidation, Inc., since
19148. was aitle( Chaihirilultlt at
the anual iteetig of the Foun
datioi's trcustees. lie succeeds
.Joint W. Ilaises who hteaei the
oirgliiiatiois for a lozet years.
The research organization
marked its 20thI aIniversary
ivth a tax conference, The
Tax Outlook fis 1958 and its
atiniversay diner hell ott o lc-
cessive days in )ecelnher. Two
hiundred tax experts and ad-
visers atlentled the conference
and 850 the titenilber dinne.
Sect. John L. McClellan cc-
ceived the annual Tax Fnunda-
Gov't Waste
Out As World
Faces Crisis
Since the rise of big Federal
glaortcl t full tite ieei to
spen billhniis lt clefense lire-
cinIts the , Ispec I t or UI '
of aly lix l!ee, d ie iahritn
nlmist colicltia, iin elhiihlia.
I il t iloiessei-
I n FelleralI
spendl~ing and
strive for rater
ecolollny In1 iv.
Crluelit, Sell.
John L. M~cClel-
]all believes.
If we mte to
inert the challenge of world
ihungers, it is innperalihe weC
mlainitain sondt fiscal policies
ald keel) our econlnIy strmlg,1
lie asserted aL Fax o ululation's
201h anniversary dinner.
Ile midahlie iin|recedeuted
obligatiolm and( tile national
decbt tile U., hias hinured; the
existinlg heavy tax bulrdenl, anid
the exacting demnlads mnade
by wvorld conditionls, emphlati.
call), precutle -.ful deny to us
eithler t he tighIt or tie luxury of
ally wtsle, extravaganlce or non.
essential expeuilures whaLso.
ever of the tax resources of tiff
nation.
ThE: Airkfius~as Senator tic,
('lared that to Imeet itS leapoll.
sibiliti+s in these litte$. C]oin.
gress 1dcs ieatll IIeeils* to inl-
pletnen tie presenit appropria-
tioln process. it labors today
nuidtcr a very' seriouts handicap,
lie addled, but olle that call be
remedied,
I le urged renced considera
lionl of [ihe creatioin of a joint
Commnittee onn the ihildg't a'
olie lneaufi of rectifying Conil
gress' instant lack of knotwledge
to enable it to deal intelligently
with tle thousands of Sp)endihng
requests inade nnnui ly.
The ]roposal envio 11 a
eolnr inittee made tip of ine011imrs
of the I fouse and Senate Appro.
priations Commilttees, started
withl technically trained experts,
investigators and{ accouutallts.
I would make this] 0oint caln.
mnittee, lie said, tile watcdog
agent of the Congress to ( lie
work, to get tie facts In to
give the Congress the in1;ormia-
tioni it nleeds to enable it to
mnake cuts in appropIriations
where they ran ault should lie
made in the interest of goverui-
mnentl efficienlcy anld el'aan1.
tion award for (listiitgillhef
public service for hi wtik is
hairmanl, Seiate Coitttiite
on Cctscriulel OperClovois auih
as a iiiuiber til ot Ilomir
Colsnissiillls.
A scroll was ilesetited to l
[red F'. Slhat, Jr.. forner rhaii.
tian of Geieral Motois Cut
polation aolit of cthe flulinld.
ers of 'IT, honoritg him itr
his work with the irganinaioti.
Air. Il.ites was ireselltci ;i
scroll htmioriug liuit for his
yeats of leadership. Ih will ('oil-
fintue hlis associatini with the
Foundatiln as c;haicnai of it-
Excnttive Coi1iiiui; ,e.
Hits Fallacies
In Progressive
Corporate Tax
Iproposals for leryig pla gles
sive coriporate UilOnle taxIes.
particularly lise whih lidd
out suh 111eastires wouhl ;fid
small btusiness
~~I~re sritii-
Grind, Ir., 1,1(c
P'leshldiit, (0ih
At a t 1i 1 e I itt
Cilieilihal co:t po
11rationl, in :iu aft.
cl es, liefote '1 'ax
iiouidaliun's Ilh anual 'Iax
(o Ifcteilt e.
Coiuliieliig Oil tiese lie,
ilosals behue au auidieuce e1 mix
heas of Anieiican iidulists)
ilr. ('rand warined: 'Ahohtugh
these (progressive coriorate
rate prio sils) died a Coiigres.
sionIli deah in tie last sessuin.
it is very Clear ihat cile dawu o
cite Space Age till be sel Ii-
their advocates to reargiue ant
to reopeu cite case.
Refitihg argleiusts that
luiese treasures wouldi help
strall busiess, Mr. C ratl. a
Foundallion trustee, poirited t
that there are lnore UllitOr.
poraed suall buisinesses hai
tnorporaleh otes.
He noted that if a luishiess is
a. protrietoirtilj or pat toershiph-,
rite pelrsonal incOlle lax 'I'-
dices the incentive to luie-
take nisjor expaisiotis il at
least che satie degree t hitt'
corporate tax imphedes extlai-
shouts by suttall corporations.
A Progressive corporate in-
Cote tax rate, Mr. Grind said,
has a built-i oueclanlstu de.
signed to prevent ite very o -
jectives which its sposors ide-
cate. Utler itrogressivc rates,
every increase in earnings, ie
said, is penalled by a htighec
rate (if llx.
Tax relief is sotught i tillet
to perUiit their biusiness to gi mi
ant lipand, andu )et. lse ted.
i1iiictl idvocaled is desiged ic
1o otherwise, lie saull.
Progiessiou i cite corptialte
rate, lie olbservedi. will nti
achieve its abjectise of iiilg
smnall butsintess becaluse a sll.ai1
cortoruurat .oul ay be owued lty aI
few large stockholders and, cnt.
versely. ;i large one niI he
owiedC by seeral hundheti tlioll.
sand peoilhe.
lie urgstl that Ihe same seise
of urgeucy tiow dlireted Io a
reevaluaitil at ite isa lion'll is-
site prograi should lie clie
tlcl towards tle tax piogratu.
Magill Named TF Chairman](ViewImageLocal?handle=hein.tera/taxfeaturs0002&div=1&collection=&method=preview&ext=.png&size=3)